Howmet falls after GE Aerospace agrees to buy CPP for $11.75 billion
BUZZ-Howmet falls after GE Aerospace agrees to buy CPP for $11.75 billion Updates
** Shares of aircraft parts maker Howmet Aerospace HWM.N down 7% at $241 after engine maker GE Aerospace GE.N agrees to buy HWM rival Consolidated Precision Products
** GE to buy CPP from investment firms Warburg Pincus and Berkshire Partners for $11.75 billion
** Deal could help GE gain greater control over a key source of precision castings used in jet engines and comes a few days after Elon Musk touted SpaceX's SPCX.O ambition to start in-house casting of gas turbine blades and vanes
** GE shares up marginally in morning trade
** HWM stock may come under pressure near term given GE's move to vertically integrate via a HWM competitor, even though HWM's financials are unlikely to see any negative impact from the GE/CPP combo in the next five years - TD Cowen
** CPP accounts for ~25% of GE's airfoil demand today & will remain at that level by 2030, aimed to be complementary & not a replacement of other blade & vane suppliers - Jefferies
** Median PT of 24 brokerages covering GE is $400, while median PT of 23 brokerages covering HWM is $335 - data compiled by LSEG
** YTD as of last close, GE up 5% and HWM up 22%
(Reporting by Anshuman Tripathy)