The French finance minister has said that the government is selling a 3.6% stake in jet engine maker Safran Group and will use the proceeds of approximately $1.3 billion to make other investments to boost the nation’s economy. The French government will remain Safran’s largest shareholder with a stake of more than 22%.
Safran subsidiary Snecma is a 50-50 partner with General Electric Co. (NYSE: GE) in a joint venture named CFM International that will build the engines for 737 MAX aircraft from The Boeing Co. (NYSE: BA). CFM International currently builds engines for the Airbus A380 jumbo jet that competes with Boeing’s 747 aircraft.
Boeing claims that more than 1,000 737 MAX models have been ordered since the plane’s announcement in August of 2011. The first flight for the new aircraft is scheduled for 2016 and first deliveries to customers are scheduled for 2017. List prices for the three models of the 737 MAX range from about $85 million to $110 million. The Airbus competitor, the A320neo, carries a list price of around $100 million.
Boeing’s shares are trading about 1.3% higher in the mid-afternoon on Thursday at $135.10, a new 52-week high of $134.99. The price hike is likely related to the rejection of a contract extension by Boeing’s largest union and the likelihood that the company’s new 777X plane will be manufactured outside the state of Washington.