BABCOCK International, which operates the Rosyth dockyard and the Faslane base in Scotland, has said it plans to form a joint venture with a leading provider of helicopter services for North Sea oil and gas firms.
The engineering services firm said it was in talks with Avincis following a report that it was preparing a £1.5 billion bid for the company, which bought the Bond Aviation helicopter business in 2011.
The company said: "Babcock International Group confirms that it is in exclusive discussions regarding the establishment of a joint venture with respect to Avincis ... This initiative is in line with Babcock's stated strategy to grow from its position as the UK's leading engineering support services company in both the UK and overseas."
Babcock said there can be no certainty the discussions will lead to any transaction.
In July, as it announced a 16% hike in underlying profits to £317.8 million in the 12 months to March 31, Babcock said it was well-positioned for the full year with a "robust financial position" and strong cash generation across the business.
While Babcock may be best known for the Rosyth yard's role in assembling the two giant aircraft carriers commissioned by the Ministry of Defence, the company is active in oil and gas engineering. In January, the Rosyth dockyard won a contract worth more than £30m to build subsea structures for oil fields to the west of Shetland.
Avincis is 50% owned by the KKR private equity business. The remainder is held by Italy's Investindustrial, which owns Aston Martin.
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