Canadian aerospace company Bombardier has announced, in a statement, the sale of its regional jet program, CRJ, to Japan’s Mitsubishi Heavy Industries Ltd. (MHI)
In total the deal is valued at $750 million; MHI will pay $550 million in cash upon closing of the deal with Bombardier in the first half of 2020, along with assuming debt amounting to approximately $200 million.
MHI will acquire: the maintenance, support, refurbishment, marketing, and sales activities for the CRJ Series aircraft. This deal will include the type certificate of the aircraft family, along with its support network located in Montréal and Toronto; also included are its service centres located in Bridgeport, West Virginia, and Tucson, Arizona.
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 production of the CRJ aircraft family is expected to end in the second half of 2020, once the backlog of orders for the aircraft has been delivered. The facility in Mirabel, Canada will remain with Bombardier and continues to supply components and spare parts.
Seiji Izumisawa, President & CEO of Mitsubishi Heavy Industries Ltd. commented “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. 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” said Alain Bellemare, President and Chief Executive Officer, Bombardier Inc.
Bombardier is seeking to exit the commercial plane market and focus on business jets and its large rail segment.
“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”
This announcement confirms previous rumors that the two firms were in discussions regarding the acquisition of Bombardier’s CRJ program.