GE Aerospace pays $11.75 billion for castings supplier CPP, at 26 times 2027 EBITDA before synergies

GE Aerospace agreed to buy Consolidated Precision Products for $11.75 billion, its largest acquisition since becoming a standalone company, taking direct ownership of a castings supplier it has bought from for more than fifteen years. The sellers are private equity owners Warburg Pincus and Berkshire Partners, and GE will fund $7 billion of the price in cash with the remainder in new debt. The transaction is expected to close in the second half of 2027, subject to regulatory approvals and customary closing conditions, and GE says it will be accretive to adjusted earnings per share and free cash flow in the first year excluding one-time costs and deal amortization.

The valuation is where this deal asks something of shareholders. GE values CPP at roughly 26 times its expected 2027 EBITDA before synergies, falling to about 18 times once expected net synergies are counted. No dollar synergy figure was disclosed, so that spread between 26 and 18 is doing considerable work and is not independently checkable today. CPP is expected to generate about $2 billion of revenue in 2027, with roughly 70% of it coming from commercial and defense engines, and employs around 6,600 people across more than 20 facilities.

The strategic logic is supply, not scale. Precision castings and airfoils are the acknowledged bottleneck in engine output, and GE expects airfoil demand to rise more than 30% by 2030 from 2026 levels against an installed base of roughly 50,000 commercial and 30,000 military engines that has to be kept flying. Owning the castings step converts a supplier negotiation into an internal capacity decision, which matters far more when the constraint is physical throughput than when it is price. For a company with approximately 57,000 employees, absorbing 6,600 more across a distinct manufacturing discipline is a real but manageable integration.

The market read it as a transfer of value rather than creation of it. GE shares were little changed, trading at $336.70 and down 0.1% on our own quote, while castings competitor Howmet fell about 8% on the prospect of a vertically integrated rival. One signal worth flagging: SentiSense data shows GE's put-to-call volume ratio at 4.25, the 100th percentile of its one-year range, meaning options positioning turned unusually defensive around the announcement even as the shares held flat. Watch the regulatory path, given GE is buying a supplier that also serves its competitors, and watch whether GE ever quantifies the synergy number that separates 26 times from 18 times.

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