Fiat and Finmeccanica have reached agreement for the transfer of the controlling shareholding in Alfa Romeo Avio to FiatAvio.
A similar agreement has already been concluded with Alitalia for the disposal of its shareholding.
The terms provide for the sale of Finmeccanica's holding of 77.5%, whilst Alitalia, which currently holds 22.5% of the company, will retain a 5% stake.
This operation is fundamental to raising the competitiveness of the Italian aero-engine industry, which is currently fragmented into a number of active companies, and reflects developments in other countries.
The synergies between the two companies, the complementary nature and advanced technology of their operations and the existence of previous joint ventures for certain specific projects will enable Alfa Romeo Avio to act more incisively in competition with other major European and American players, whilst also safeguarding the company's technological expertise and guaranteeing its future development.
Alfa Romeo Avio has plants at Pomigliano d'Arco and Acerra in Novara and has a turnover of $196 million, employing 1,500 staff.
The company is active in two segments of aeronautical engineering, construction and servicing.
In the construction segment, Alfa Avio specialises in the planning and production of low-, medium- and high-powered sub-systems for aero-engines and in the assembly, testing and running of completed low-powered engines.
Clients are represented by businesses and association which operate both in the civilian market (48% of income) and the military market (52% of income).
In the servicing segment, the company carries out check-up, repair, final assembly and support for turbo-shafts, turboprops, turbojet engines, turbofan engines and the relevant parts.
Furthermore, the company is playing an active role in various international projects, including the development of Tornado, the Eurofighter 2000, the AMX and the EH101 and NH90 helicopters.
FiatAvio is the Fiat Group's principal company operating in the aerospace industry. In 1995, the company had a turnover of approximately $1.08 billion generated from aero-engines (51% of turnover), gas turbines (29%) and space (20%).
Specifically, the aeronautical division, which employs approximately 3,200 staff out of FiatAvio's total 4,900 employees, is responsible for the development, construction and servicing of aeronautical turbine engines and power transmission systems for fixed-or rotary-winged civilian and military aircraft.
Among the principal engines, produced in collaboration with other world aero-engine manufacturers, particularly noteworthy are: the GE90 engine for the Boeing 777, which is the most powerful aeronautical engine in the world; the PW4000 and the GE CF 6-80 engines for the Boeing B747 ''Jumbo'', the EJ200 which will be fitted to the Eurofighter 2000; and the RB199 for use in the Tornado.