French defence group Safran entered into exclusive negotiations with Exail Technologies over a possible acquisition of the sea drone maker at €128.5 ($146.71) per share, the companies said on Friday.
The deal would see Safran buy the Gorge family's controlling stake in Exail, followed by a mandatory public offer.
The Gorge family owned 43.92 per cent of Exail Technologies at the end of 2025, according to the company's annual report.
Shares of Exail were up 27 per cent at 14:50 GMT.
The news was first reported by Bloomberg News, citing people familiar with the matter.
Safran produces drones such as the medium-altitude Patroller, used for intelligence, and the smaller kamikaze drone Warbler. It also designs drone navigation systems through its Safran Electronics and Defence division.
"A name such as Safran supports Exail’s strategic nature for the French State, which would likely not have allowed an acquisition by a financial sponsor or a foreign industrial player," said Julien Thomas, analyst for Paris-based TP ICAP Midcap.
Thomas said the Gorge family buyout price looked credible, but the offer towards minority shareholders seemed unlikely to succeed given the "modest" 20 per cent premium over the one-year average.
Exail saw its shares surge following the outbreak of the Iran war, driven by expected demand for sea drones to help in de-mining the Strait of Hormuz. However, its shares tumbled recently after it failed to reach an agreement with creditor ICG.
Thomas highlighted the uncertain timing, with Exail still in talks with ICG, which holds about a third of the group's controlling holding company, over a valuation dispute that a new bidder risks complicating further.
"We question whether Safran is the ideal acquirer for Exail at this stage," said Thomas, adding Safran could face antitrust risks as it already largely equips France's nuclear submarine fleet.
(Reporting by Hyunsu Yim in Barcelona, Margaux Perrin, Leo Marchandon and Piotr Lipinski in Gdansk, Florence Loève in Paris; Editing by Emelia Sithole-Matarise, Tomasz Janowski, Joe Bavier and Louise Heavens)
