Boeing Suppliers Woodward and Hexcel to Merge
January 12 2020 - 5:15PM
Dow Jones News
By Doug Cameron
Woodward Inc. and Hexcel Corp. set plans to merge, a deal that
would combine two big Boeing Co. suppliers as aerospace companies
grapple with fallout from the grounding and halted production of
the 737 MAX.
The two U.S. companies produce parts and spares for Boeing and
Airbus SE jets as well as a range of military aircraft. They said
on Sunday that their proposed deal would help accelerate research
and development spending on new technologies. Together, Woodward
Hexcel would rank among the aerospace industry's largest suppliers,
with combined sales of $5.3 billion last year and 16,000 staff.
The deal would be the first big transaction in the industry
since Boeing said it would freeze production of the MAX. Many
potential deals have been placed on hold or abandoned because of
uncertainty over future production of the MAX, said aerospace
bankers.
Both Woodward and Hexcel have reported a limited impact on their
businesses since MAX production was reduced last year. But they
have said sales of spares have been hit by the absence of
deliveries.
Fort Collins, Colo.-based Woodward makes cockpit systems and
actuators -- the motors that control wing flaps and other
flight-critical functions -- for commercial and military aircraft.
Stamford, Conn.-based Hexcel is a specialist in composite materials
such as carbon fiber, which are increasingly used in aircraft and
their engines systems.
Boeing has been moving production of some of that work in house,
opening its own actuator plant in the U.K., and has considered
buying Woodward in the past.
The proposed deal would be structured as a merger of equals,
with Woodward shareholders owning 55% of the combined entity.
Hexcel Chief Executive Nick Stanage would lead the combined company
with Woodward CEO Tom Gendron becoming executive chairman.
The proposed terms call for Hexcel shareholders to receive 0.625
Woodward shares for each one they hold.
Write to Doug Cameron at doug.cameron@wsj.com
(END) Dow Jones Newswires
January 12, 2020 17:00 ET (22:00 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.
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