In a significant step forward in the restructuring of its Defence & Space division, Airbus Group has finally reached agreement with private equity firm KKR to sell its Ulm, Germany-based defence electronics unit. The unit provides mission-critical sensors, integrated systems and services for defence and security applications.

KKR has valued the defence electronics business at an enterprise value of approximately €1.1bn. Airbus Group indicates that it may maintain a minority stake to ensure a smooth and seamless transition for the business, its employees and partners.

Defence Electronics includes around 4,000 employees worldwide, with annual revenues of around €1bn. Since January 2016, the unit has operated under the management team as one business within Airbus Defence and Space. The divestment had been expected under a restructuring plan announced in 2014.

KKR manages investments across multiple asset classes including private equity, energy, infrastructure, real estate, credit and hedge funds. The firm is not a newcomer to the aerospace/defence sector, having briefly owned MTU Aero Engines in the mid-2000s. KKR acquired the company on 1st January 2004. An IPO was launched the following year and KKR sold its remaining stake in February 2006 … at a handsome profit.