Europe’s Airbus Group on March 18 said that the global investment firm KKR [KKR] has agreed to acquire its Defence Electronics business for $1.2 billion, a major step in the portfolio shaping of the Airbus Defence and Space division announced in September 2014.

The transaction is expected to close in the first quarter of 2017 subject to regulatory approvals and employee consultation. Airbus Group said it might retain a minority stake in the electronics unit.

The Germany-based electronics business provides sensors, avionics, optronics, integrated systems and services to customers globally.

“KKR will support the growth and development of the company with its financial resources, international network, long-standing expertise in the global industrial sector and its extensive experience building successful industrial companies in Germany, such as MTU Aero Engines, Demag Cranes and Kion,” Johannes Huth, member and head of KKR Europe, Middle East and Africa, said in a statement.

Defence Electronics has about 4,000 employees and annual sales of about $1.1 billion.

KKR is headquartered in the United States.