SMGZY Smiths Group PLC (PK)

French aerospace and defense supplier Safran SA said Thursday it has begun exclusive talks to sell its identity and security business in a transaction that values the operation at €2.4 billion ($2.7 billion).

Safran said it was planning to sell the assets to private-equity firm Advent International Corp. The deal is expected to close next year, the Paris-based company said, pending regulatory approvals in the U.S. and Europe.

The move comes as Safran focuses increasingly on its aerospace and defense activities, where it is a major supplier of everything from engines for Boeing Co. and Airbus Group SE planes to rockets. Safran this year sold its Morpho Detection explosives detection business to Smiths Group PLC.

Safran Chairman Ross McInnes said that "upon the closing of this transaction, which would follow our agreement to sell our detection activities, Safran would be a group entirely focused on aerospace and defense and concentrated on its own path of strong growth and high profitability."

Safran said the identity and security operations would be put together with French digital security assets from Oberthur Technologies, which was acquired by Advent International in 2011. The combined business would have €2.8 billion in sales, Safran said, and would remain based in France.

The deal will also involve French public investment bank Bpifrance, which will take a stake and join the board of the combined entity, Safran said.

Safran said the deal would result in a pretax capital gain for the company.

Write to Robert Wall at robert.wall@wsj.com

(END) Dow Jones Newswires

September 29, 2016 10:05 ET (14:05 GMT)

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