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ST Engineering unit gets US government go-ahead to buy engine parts maker
MAINBOARD-LISTED Singapore Technologies Engineering has been allowed to buy a maker of critical aeroplane engine parts from the United States’ General Electric, it disclosed on Sunday.
Its US subsidiary Vision Technologies Aerospace Incorporated obtained clearance from a US government committee to buy Maryland-based engine nacelle systems manufacturer MRA Systems, ST Engineering said.
Now, as long as the rest of the conditions for the acquisition are completed or waived, the US$630 million deal - which is expected to be earnings-accretive - should close in the coming week, added ST Engineering, which is 51 per cent-owned by national investment firm Temasek Holdings.
MRA Systems holds single-source contracts for both mature and next-generation nacelle programmes, including engines for Airbus’ A320neo - the aircraft model that reportedly pushed US competitor Boeing to rush through the development of its ill-fated 737 Max planes.
ST Engineering previously said that the acquisition would scale up its aerospace capabilities by moving it into the original equipment manufacture of high-value nacelle parts, in a hunt for new growth areas to invest in.
The Committee on Foreign Investment in the United States, an inter-agency US government body, reviews deals involving foreign investors for national security concerns. Its work made headlines in 2018 when it blocked chipmaker Broadcom’s plans to buy out rival Qualcomm.
In another recent high-profile intervention, the committee has reportedly flagged a Chinese company’s ownership of gay dating app Grindr as a national security risk as well.