Boeing Co won permission on Friday from Europe's top antitrust regulator to buy aerospace parts supplier Aviall Inc for $1.7 billion. The deal will help the US planemaker to expand its services operations in the wake of a boom in new aircraft orders - it took a record 1,002 commercial plane orders in 2005, while European rival Airbus had 1,055.
But orders are expected to fall short of that mark this year, suggesting that over the next few years supplying parts and maintaining existing planes will become more important to planemakers' operations.
"The (European) Commission has concluded that the transaction would not significantly impede effective competition in the European Economic Area," the executive arm of the European Union said in a statement.
Boeing's Commercial Aviation Services unit is expected to bring in revenue of about $3 billion this year, which would expand by more than 40 percent with the addition of Aviall. Boeing had total revenue of $55 billion last year.
Boeing said it would pay $48 per share in cash for Aviall and take on about $350 million of Aviall debt. It said the deal would not affect Boeing's earnings this year.
Dallas-based Aviall, with annual revenue of about $1.3 billion, is the world's leading independent distributor of new aviation parts to the aerospace, defence and marine industries world-wide.
The company will become part of Boeing's Commercial Aviation Services unit, which maintains airlines' inventory of maintenance supplies - including spare parts - providing items only as needed, with the aim of cutting costs for airlines. Aviall's parts ordering and supply chain management will also be used by Boeing's defence unit, the company said.
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