General Dynamics buys Jet Aviation for $2.18 billion

General Dynamics has finalised its purchase of Jet Aviation, based in Zurich, Switzerland, for $2.18 billion. The deal had been first announced in August 2008.

It was from Dreamliner Lux S.a.r.l., a company controlled by the Permira Funds, an international equity firm which has its largest office in London, that General Dynamics bought Jet Aviation.

General Dynamics Corporation, based in Falls Church, Virginia, the United States,  is a defence conglomerate formed by mergers and divestitures. It is currently the fifth largest defence contractor in the world. General Dynamics has four main business segments: Marine Systems, Combat Systems, Information Systems and Technology, and Aerospace. The company’s former division at Fort Worth, Texas, the United Statees, manufactured the F-16 Fighting Falcon, the most-produced Western jet fighter, but that subsidiary was sold to Lockheed in 1993. General Dynamics re-entered the business of airframe in 1999 with its purchase of Gulfstream Aerospace.

General Dynamics, which employs 91,200 people worldwide, is a global leader in producing, supporting and sustaining land and expeditionary combat systems for the United States military and its allies. It anticipates revenues to the tune of around $29.5 billion in 2008.

The business-aviation services company Jet Aviation, founded in Switzerland in 1967, has 5,600 employees and supports 25 airports throughout Europe, the Middle East, Asia and North and South America. Jet Aviation and its principal subsidiary companies serve nine markets in the United States, including San Antonio, Texas.

According to a statement from Jet Aviation, the company’s sites at airports provide aircraft maintenance, repair and overhaul services; aircraft completions and refurbishments; engineering; fixed-base operations; aircraft management, flight support and global executive-jet charter services; and aircraft sales, acquisitions and personnel services. Jet Aviation’s European and US aircraft management and charter divisions jointly operate a fleet of over 200 aircraft and provided over 65,000 hours in global flight operations in 2007.

In the past three years, under the control of the Permira Funds, Jet Aviation has developed from a family-owned business to a global leader in business aviation services, the statement added.

Following the buyout, Jet Aviation will function as a new business unit within the General Dynamics Aerospace group and will operate under the Jet Aviation and Midcoast Aviation brands. The present management will stay.

Nicholas D Chabraja, chairman and chief executive officer of General Dynamics, was quoted by the media as remarking on the deal: “We are very pleased to add Jet Aviation to the industry-leading portfolio of business-aviation products and services that currently are provided by the General Dynamics Aerospace group, and to partner with the current management team to continue its success. As a unit of General Dynamics, Jet Aviation positions us to capture additional growth opportunities in the business-aviation market.”