Fiat to Sell FiatAvio Aerospace Unit

Fiat, Italy’s largest manufacturer, agreed to sell its aerospace unit to Carlyle Group Inc. and Finmeccanica for $1.7 billion, as the company raises money to turn around its carmaker.

The offer prices FiatAvio at $100 million less than the bid made in April by the U.S. buyout firm and Finmeccanica, Italy’s largest defense company, and comes amid consolidation in Europe’s aerospace and defense industries.

FiatAvio, one of Fiat’s most profitable units, makes boosters for the Ariane 5 space rocket and parts for military and commercial planes and helicopters.