Sagem of France reports the joint venture with MTU Aero Engines will be called AES Aerospace Embedded Solutions GmbH.
The new company's product line will include control systems for engines -- such as the TP400-D6 turboprop that powers the Airbus A400M military transport -- controls for landing gear, braking, monitoring and information systems.
Safran Electronics will provide support and access to its large portfolio of onboard electronic systems while MTU Aero Engines will contribute engineers.
"The grouping of competences is a determining step to jointly open new markets," said Egon Behle, chief executive officer of MTU Aero Engines. "Therefore, the new joint venture will offer additional positive perspectives for our businesses.
"Together with Sagem we will focus on accessing a multitude of future development programs within the global aviation and defense industry."
Formation of the new company follows a memorandum of agreement signed late last year.
"For MTU and Sagem, the creation of AES marks a significant step forward in the consolidation of European centers of excellence in critical aerospace and defense technologies," Sagem Chief Executive Officer Philippe Petitcolin said. "Along with our partner, we now have a competitive, innovative offering of products and services that allows us to better meet the requirements of new European programs."
AES will be based in Munich, Germany, and will begin operations by the end of this year.