(Reuters) – Textron Inc (TXT.N), maker of Cessna planes, said it will buy aircraft maker Beechcraft Corp for about $1.4 billion in cash, in a deal that sees Textron expand its aviation business.

Shares of Textron were up about 3 percent in extended trading after the announcement of the deal.

Beechcraft emerged from bankruptcy protection in February and was seeking buyers for its jet plane business which has been losing money.

Textron, which also makes the Bell helicopter, said it plans to finance the deal through a combination of available cash and up to $1.1 billion in new debt.

The deal is one of the largest after a U.S. budget agreement that experts say could set off the most robust series of mergers and acquisitions in the aerospace and defense sector in years.

In case Beechcraft is able to find a higher bidder, it will be liable to pay a termination fee of $48 million to Textron, Beechcraft said in a statement.

Credit Suisse and Morgan Stanley acted as financial advisors to Beech Holdings. JP Morgan served as financial adviser to Textron.

(Reporting by Narottam Medhora in Bangalore; Editing by Anupama Dwivedi)