General Dynamics to buy Jet Aviation for $2.25 billion

(Reuters) - General Dynamics Corp (GD.N) said it agreed to acquire Zurich-based Jet Aviation, a privately held provider of business-aviation services, for about $2.25 billion in cash.

The U.S. defense contractor said the deal, which would expand its flight support services, is expected to immediately add to its earnings.

It expects the acquisition to close by the end of 2008.

Jet Aviation, which is currently owned by private equity firm Permira Funds, provides maintenance, repair and overhaul services for business jets. It also charters executive jets.

Following the acquisition, Jet Aviation will operate as a business unit within the General Dynamics Aerospace group under the Jet Aviation and Midcoast Aviation brands.

General Dynamics, which makes Abrams tanks and Gulfstream aircraft, said the current management of Jet Aviation will not change.

The Swiss firm has about 5,600 employees, General Dynamics said in a statement.

(Reporting by Saumyadeb Chakrabarty in Bangalore; Editing by Mike Miller)