Canadian aerospace giant Bombardier has announced the sale of its regional jet program to Mitsubishi Heavy industries.
The move is the fruition of Bombardier’s plans to exit the commercial aviation business and refocus on their other industries such as business jets.
“We are very pleased to announce this agreement, which represents the completion of Bombardier’s aerospace transformation,” said Alain Bellemare, President and Chief Executive Officer, Bombardier Inc. “We are confident that MHI’s acquisition of the program is the best solution for airline customers, employees and shareholders. We are committed to ensuring a smooth and orderly transition.
“With our aerospace transformation now behind us, 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.”
The deal involves a cash consideration of $550mn and Mitsubishi’s assumption of approximately $200mn of liabilities. Mitsubishi will acquire the maintenance, support, refurbishment, marketing, and sales activities for the Canadair Regional JetSeries aircraft, including related services, support networks, service centres and type certificates.
Seiji Izumisawa, President & CEO of Mitsubishi Heavy Industries Ltd., said: “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 (MRO), engineering and customer support.
“The CRJ program has been supported by tremendously talented individuals. In combination with our existing infrastructure and resources in Japan, Canada and elsewhere, we are confident that this represents one effective strategy that will contribute to the future success of the Mitsubishi SpaceJet family. MHI has a decades-long history in Canada, and I hope this transaction will result in the expansion of our presence in the country, and will represent a significant step in our growth strategy.”
Subject to the usual conditions, the deal is expected to close during the first half of 2020.