Herakles, as it is called, will be comprised of SME and Snecma Propulsion Solide.
SME, acquired by the Safran Group last year, specializes in the area of energetic material while Snecma is a specialist in solid rocket motors.
"The decision to form a single company for solid propulsion is a key to the emergence of a world leader in this field, and Safran has risen to this challenge by creating Herakles," said Philippe Schleicher, chairman and chief executive officer of Herakles.
Safran said Herakles will be organized around a Research and Technology division and will operate in the business sectors of strategic and tactical propulsion, propulsion for space vehicles, aeronautics and thermo-structural composites, among others.
Safran said the new company should generate annual sales of nearly $926.5 million.
"Melding the complementary skills of SME and SPS is a highly logical move in today's environment," said Herve Austruy, deputy chief executive officer of Herakles.
"It bolsters our international positions and gives us significant competitive advantages in terms of our expertise, operational support and technological innovations."