- MHI now positioned to transform and lead the underserved
regional jet business, with bolstered customer support
services
- Key step in MHI’s strategy of expanding its aircraft
business globally, with a mid-term focus on North America
- Completes Bombardier’s aerospace transformation and refocus
on business aviation
Mitsubishi Heavy Industries, Ltd. (MHI) (TOKYO:7011) and
Bombardier Inc. (TSX:BBD.B) announced today they have entered into
a definitive agreement, whereby MHI will acquire Bombardier’s
regional jet program for a cash consideration of $550 million USD,
payable to Bombardier upon closing, and the assumption by MHI of
liabilities amounting to approximately $200 million USD. Under the
agreement, Bombardier’s net beneficial interest in the Regional
Aircraft Securitization Program (RASPRO), which is valued at
approximately $180 million USD, will be transferred to MHI.
Pursuant to the agreement, MHI will acquire the maintenance,
support, refurbishment, marketing, and sales activities for the CRJ
Series aircraft, including the related services and support network
located in Montréal, Québec, and Toronto, Ontario, and its service
centers located in Bridgeport, West Virginia, and Tucson, Arizona,
as well as the type certificates.
This acquisition is complementary to MHI’s existing commercial
aircraft business, in particular the development, production, sales
and support of the Mitsubishi SpaceJet commercial aircraft family.
The maintenance and engineering capabilities of the CRJ program
will further enhance critical customer support functions, a
strategic business area for MHI in the pursuit of future
growth.
Seiji Izumisawa, President & CEO of MHI, commented: “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.”
Izumisawa concluded, “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.”
“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.”
Bellemare continued: “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 CRJ production facility in Mirabel, Québec will remain with
Bombardier. Bombardier will continue to supply components and spare
parts and will assemble the current CRJ backlog on behalf of MHI.
CRJ production is expected to conclude in the second half of 2020,
following the delivery of the current backlog of aircraft.
Bombardier will also retain certain liabilities representing a
portion of the credit and residual value guarantees totaling
approximately $400 million USD. This amount is fixed and not
subject to future changes in aircraft value, and payable by
Bombardier over the next four years.
The transaction is currently expected to close during the first
half of 2020 and remains subject to regulatory approvals and
customary closing conditions.
The agreement contemplates a reverse break fee payable by MHI
under certain circumstances.
About MHI
Mitsubishi Heavy Industries, Ltd. (MHI), headquartered in Tokyo,
is one of the world’s leading industrial firms with 80,000 group
employees and annual consolidated revenues of around US$38 billion.
For more than 130 years, the company has channeled big thinking
into innovative and integrated solutions that move the world
forward. MHI owns a unique business portfolio covering land, sea,
sky and even space. MHI delivers innovative and integrated
solutions across a wide range of industries from commercial
aviation and transportation to power plants and gas turbines, and
from machinery and infrastructure to integrated defense and space
systems.
For more information, please visit MHI’s website:
www.mhi.com/index.html
About Bombardier
With over 68,000 employees, Bombardier is a global leader in the
transportation industry, creating innovative and game-changing
planes and trains. Our products and services provide world-class
transportation experiences that set new standards in passenger
comfort, energy efficiency, reliability and safety.
Headquartered in Montreal, Canada, Bombardier has production and
engineering sites in 28 countries as well as a broad portfolio of
products and services for the business aviation, commercial
aviation and rail transportation markets. Bombardier shares are
traded on the Toronto Stock Exchange (BBD). In the fiscal year
ended December 31, 2018, Bombardier posted revenues of $16.2
billion US. The company is recognized on the 2019 Global 100 Most
Sustainable Corporations in the World Index. News and information
are available at bombardier.com or follow us on Twitter
@Bombardier.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20190625005543/en/
Corporate Communication Department Mitsubishi Heavy Industries,
Ltd. mediacontact_global@mhi.co.jp
Bombardier (TSX:BBD.B)
Historical Stock Chart
From Mar 2024 to Apr 2024
Bombardier (TSX:BBD.B)
Historical Stock Chart
From Apr 2023 to Apr 2024