A sign marks a General Electric (GE) facility in Medford, Massachusetts, U.S., April 20, 2017. REUTERS/Brian Snyder

SINGAPORE (Reuters) - Singapore Technologies Engineering Ltd on Thursday said it had agreed to purchase aircraft part manufacturer MRA Systems from General Electric Co for $630 million.

The Singapore-based company, which conducts maintenance and repair operations for airlines, said the deal would allow it to move upstream into the manufacturing and spare parts business for engine nacelles, the casing that houses an aircraft engine.

In partnership with Safran Nacelles, U.S.-based MRA is the sole supplier of nacelles for Airbus SE A320neos using LEAP-1A engines manufactured by CFM International, a GE and Safran SA joint venture.

The deal comes at a time when industrial conglomerate GE is slimming down its business to focus on jet engines, power plants and renewable energy.

ST Engineering has been branching out into new business lines such as seat manufacturing and aircraft leasing as it faces increased competition from jet and engine manufacturers in offering maintenance packages to airlines.

“Moving upstream into the business of design and manufacturing of nacelles will allow us to benefit directly from the robust growth of the global aircraft fleet” as an original equipment manufacturer, ST Engineering Aerospace sector president, Lim Serh Ghee, said in a statement.

The company said the purchase was expected to be accretive to earnings, particularly as Airbus ramps up production of A320neos, increasing economies of scale.

(This version in paragraph 3, corrects a sole supplier to A320neos in partnership with Safran Nacelles)