US-based private equity firm KKR has agreed to acquire Airbus Group’s defence electronics business for €1.1bn.

Airbus Defence Electronics is a global provider of mission-critical sensors, integrated systems and services for premium defence and security applications based in Ulm, Germany.

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Under the terms of the agreement, Airbus will retain 25% stake in the company and the rest will be held by KKR, for a period of three years, reported Financial Times.

"Airbus will retain 25% stake in the company and the rest will be held by KKR, for a period of three years."

Airbus Defence and Space Bernhard Gerwert said: "Defence Electronics is a strong, profitable business with significant growth potential, and we are convinced that KKR and the Defence Electronics management team and employees will continue to strongly develop the business.

Airbus had put up the Defence Electronics unit, part of the group’s Airbus Defence and Space arm for sale as part of the company’s plan to streamline its defence and security division.

Subject to regulatory approvals, the deal will be finalised in the first quarter of 2017.

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The business unit which specialises in military sensors, electronic warfare, avionics and optronics has a global staff of 4,000 and annual revenues of about €1bn.

In a separate development, Airbus is reportedly planning to sell its 49% stake in Atlas Elektronik, a German submarine systems business jointly held with ThyssenKrupp.

Additionally, the company plans to sell its professional mobile communications business.