Aircraft-engine maker Safran SA agreed to buy plane-seat supplier Zodiac Aerospace SA for almost 10 billion euros ($10.5 billion) in an all-French deal that will unite two of the country’s biggest aerospace groups. Safran will offer 29.47 euros per share in cash, which is 26 percent above Wednesday’s close, the companies said Thursday. If at least half of Zodiac’s equity is tendered, Safran will complete the deal via a share swap, paying stock that was worth 32.63 euros Wednesday for each remaining Zodiac share. Safran, which is partnered with General Electric Co. in the CFM International alliance that makes engines for short-haul jets, is buying Zodiac after the cabin manufacturer’s share price slumped almost 22 percent over two years amid a logjam in the production of seats for Airbus Group SE’s latest A350 wide-body. Philippe Petitcolin, Safran’s chief executive officer, said the deal will create the world’s third-biggest aerospace supplier behind GE and Pratt & Whitney owner United Technologies Corp., and accelerate the return of Zodiac’s interiors operations to “historical levels of profitability.” Petitcolin will continue to run the group with Zodiac Chairman Olivier Zarrouati as his deputy. Zodiac’s founding families and two investment funds—the Peugeot family’s FFP and the Fonds Strategique de Participations—have agreed to accept Safran stock and to hold it for at least two years, according to a statement. Electrical Aircraft Safran shares rose as much as 2.4 percent to 68.85 euros at the start of trading in Paris, while Zodiac gained 24 percent to 28.85 euros, just shy of the offer price. The combination will unite Safran activities spanning turbines, landing gear, brakes and avionics with Zodiac’s cabin interiors, fuel, lighting, safety and power-distribution gear. The buyer is also keen to access Zodiac technology key to development of the “more electrical aircraft,” it said. The enlarged group will have 92,000 employees, about half of them in France, more than 20 billion euros in annual revenue and recurring operating income of 2.7 billion euros, it said. Paris-based Safran made an approach for its compatriot in 2010 before dropping the bid following a negative reaction from the Zodiac board, which said the companies had little overlap and limited potential for cost savings. The engine giant revived its interest in April last year after Zodiac cut its earnings forecasts eight times, sending its share price plunging, people familiar with the matter said at the time. A350 Issue Easing Safran has identified initial cost savings of 200 million euros, mainly from joint procurement and marketing, and will also aim to “accelerate” the recovery of Zodiac’s seats business, according to the statement. The deal should give earnings per share a double-digit boost in the first full year after completion. Airbus Chief Operating Officer Fabrice Bregier said Jan. 11 that the A350 interiors issue has begun to ease. After almost three years struggling to meet delivery schedules at both the European planemaker and Boeing Co., Zodiac last year also reported progress in the redesign and production of seat shells at a plant in California, and of lavatories for the A350. Safran has a market value of 28 billion euros and in 2015 posted net income of 1.5 billion euros, up 19 percent, on sales of almost 18 billion euros. Zodiac, based in Plaisir, near Paris, had revenue of 5.2 billion euros in the 12 months through Aug. 31 and net income of 108 million euros, a 41 percent decline.