(Reuters) -French defence and technology group Thales (EPA:TCFP) said on Wednesday it started talks to buy French supplier Cobham Aerospace Communications for $1.1 billion.

Thales shares were up around 1% in early Paris trading following the news.

Thales said that with the acquisition it aims to strengthen its portfolio in avionics – the complex electronic systems used on aircraft.

“Thales will establish a game changer in the very attractive and fast-growing communications and connectivity market,” Executive Vice-President Avionics, Yannick Assouad, said in a statement.

Cobham Aerospace Communications is a leading supplier of advanced cockpit communication systems and it is expected to generate about $200 million in revenue in 2023, Thales said.

“We see this acquisition as a positive for Thales, with a reasonable acquisition price,” Jefferies analysts said.

The transaction is expected to generate medium-term double-digit growth per annum for Thales and to have accretive impact on its margins.

It will be earnings per share accretive as of the first year post closing and bring about run-rate revenue synergies of about $40 million per annum, the company said.

Thales said it will finance the acquisition through available cash resources.

The transaction is expected to close in the first half of 2024, the company said.