Advertising

Mitsubishi Aircraft parent reaches deal to acquire CRJ programme

Bombardier has disclosed a "definitive agreement" under which Mitsubishi Heavy Industries will acquire the Canadian manufacturer's regional-jet programme.

MHI will pay a cash consideration of $550 million upon the deal's closing, in addition to assuming liabilities of $200 million, says Bombardier.

It adds that its net beneficial interest in the Regional Aircraft Securitization Program (RASPRO), valued at $180 million, will be transferred to MHI.

The Japanese group – parent to Mitsubishi Aircraft, which manufactures the SpaceJet regional airliner family – is acquiring the maintenance, support, refurbishment, marketing and sales activities for Bombardier's CRJ-series aircraft.

Bombardier specifies that the deal includes service centres in Montreal, Toronto and the US cities of Bridgeport in West Virginia and Tucson, Arizona. MHI also takes over the type certificates.

However, the CRJ production facility in Mirabel will remain with Bombardier. The Canadian company will continue to supply components and spare parts, and will assemble the current CRJ backlog on behalf of MHI. Production of the jets is scheduled to conclude in the second half of 2020.

Bombardier says it will also retain "certain liabilities, representing a portion of the credit and residual-value guarantees totalling approximately $400 million", payable over the next four years.

The transaction with MHI, still subject to regulatory approvals, will close during the first half of 2020, Bombardier expects. It notes that a "reverse break fee" is payable by MHI under certain circumstances.

Describing the acquisition as "complementary" to the buyer's existing commercial aircraft business, Bombardier asserts that "the maintenance and engineering capabilities of the CRJ programme will further enhance critical customer support functions, a strategic business area for MHI in the pursuit of future growth".

MHI chief executive Seiji Izumisawa meanwhile states: "As we outlined during the recent Paris air show, we are working hard to ensure that we provide new profit potential for airlines and set a new standard for passenger experience.

"This transaction represents one of the most important steps in our strategic journey to build a strong, global aviation capability. It augments these efforts by securing a world-class and complementary set of aviation-related functions including maintenance, repair and overhaul, engineering, and customer support."

The deal is framed as "the completion of Bombardier's aerospace transformation" by Alain Bellemare, the Canadian company's chief.

He adds: "We have a clear path forward and a powerful vision for the future. Our focus is on two strong growth pillars – Bombardier Transportation, our global rail business, and Bombardier Aviation, a world-class business-jet franchise with market-defining products and an unmatched customer experience."

Advertising
Related Content
Advertising