U.S. aerospace giant Boeing Corp. said Monday that it is partnering with French top aviation and rocket engine manufacturer Safran S.A. to establish a joint venture to produce auxiliary power units (APU) for its aircraft.
An APU is an onboard engine that is used to primarily start the main engines and power aircraft systems on the ground and, if necessary, in flight.
The deal, which is expected to close in the second half of 2018, will establish an important relationship between the world's two leading aerospace companies to work together on products and expanded service capabilities to benefit both customers and the industry at large, Boeing said.
Both Boeing and Safran will own a 50 percent stake in the new company, and the completion of the transaction is subject to customary conditions including regulatory and antitrust clearance.
Boeing said the new joint venture will leverage capabilities of the two firms to combine the best technologies and services for their customers and create a competitive offering to meet market needs.
"This strategic partnership will leverage Boeing's deep customer and airplane knowledge along with Safran's experience in designing and producing complex propulsion assemblies," said Stan Deal, president and CEO of Boeing Global Services (BGS).
BGS was set up nearly a year ago to enhance Boeing's presence in the aircraft services market.
Safran has been an APU provider since 1962 and currently supplies a wide range of components to Boeing commercial and defense programs, including as a partner to produce CFM's LEAP-1B engine for the 737 MAX passenger jets.
Its partnership with Boeing will help it break into the APU market for large commercial transports.