GE Aerospace made a surprise splash in the debate over casting technology, announcing on Tuesday it was buying casting company Consolidated Precision Products for $11.75 billion.

It's the company's first major acquisition since CEO Larry Culp broke legacy GE into three parts: GE HealthCare Technologies, GE Vernova, and GE Aerospace. The deal is expected to add to earnings per share in the first year and will be funded out of cash and debt.

It values CPP at about 26 times estimated 2027 earnings before interest, taxes, depreciation, and amortization, or Ebitda, before synergies and about 18 times including expected cost reductions. That's a fair price. Howmet Aerospace, which also has casting capacity, trades for about 28 times estimated 2027 Ebitda, according to FactSet.

The timing is serendipitous. Casting technology was recently thrown into the spotlight when SpaceX CEO Elon Musk suggested that SpaceX would invest in turbine blade manufacturing to alleviate a key bottleneck to AI growth. (AI computers need electricity, generating electricity needs power turbines, and power turbines need highly engineered blades to work).

His comments sparked a debate about whether casting companies faced a new competitive threat (SpaceX), or were in a better position given the world's richest human sees a material shortage for years to come.

The GE Aerospace deal falls on the latter side of the debate. Turbine blades end up in power turbines or jet engines. GE Aerospace is mainly interested in the ones for jets-both for commercial and military applications-but the casting technology overlaps.

The deal represents vertical integration for GE Aerospace, but not classical vertical integration, where a company controls parts capacity for its own use. CPP has third-party customers and will continue to. That will likely be fine for CPP's existing customers so long as GE Aerospace can boost output.

GE Aerospace stock was down 0.6% in premarket trading, just after the deal was announced, while S&P 500 and Dow Jones Industrial Average futures were off 0.2% and 0.8%, respectively.

Higher oil prices have been weighing on the market and shares of aerospace companies. Higher oil prices, however, also drive the need for more efficient jet engines that burn less fuel, keeping costs low for airlines and consumers. Investing in casting technology will also allow GE Aerospace to accelerate engine innovation. That's another deal benefit that investors can look forward to.

Coming into Tuesday, GE Aerospace stock has gained 9% this year and has risen 21% over the past 12 months.