Aug 4 (Reuters) - Spanish defence systems maker Indra said on Friday it had agreed to buy a 9.5% stake in local aircraft engine manufacturer ITP Aero for 175 million euros ($191.6 million) from ITP owners, U.S. fund Bain Capital.
Indra and ITP Aero, which are already cooperating on the European fighter jet project known as FCAS, have also agreed to broaden their collaboration and promote the joint development of systems and technologies.
As a result of the acquisition, Indra, in which Spanish state holding company SEPI is the single largest shareholder with a 25.16% stake, will have representation on ITP's board of directors, it said in a statement.
Indra's strategic relevance has increased since Russia's invasion of Ukraine as Spain has promised to boost its defence spending as required by NATO in the coming years.
"Indra's stake in ITP Aero's capital has a clear industrial vocation and constitutes a further step in its growth strategy to become the great driving force of the Spanish defence industry," Indra Chairman Marc Murtra said in the statement.
The group's main rivals include France's Thales and Italy's Leonardo.
Indra, which also works with information technology, expressed interest four years ago in acquiring a majority stake in ITP Aero, when it was still a Rolls-Royce unit, but no agreement was reached.
In 2022, Rolls-Royce sold ITP Aero to a consortium led by Bain Capital Private Equity for 1.7 billion euros.
Indra's entry into ITP values the engine manufacturer at 1.84 billion euros, slightly above the amount paid by Bain.
The group's shares plunged almost 4% in morning trade before recovering most of the losses to trade 0.7% lower in the afternoon. Renta 4 analysts attributed the drop to a general lack of investor support for the largely expected deal.