Mitsubishi Heavy Industries (MHI), the parent company of Mitsubishi Aircraft Corporation has entered an agreement to acquire Bombardier’s Canadair Regional Jet program.
The agreement will see Mitsubishi pay Bombardier $550 million USD and assume liabilities of approximately $200 million USD.
Mitsubishi will accuire the Canadian manufacturer’s maintenance, support, refurbishment, marketing, and sales activities for the CRJ Series aircraft – which includes 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 of the CRJ aircraft.
Mitsubishi will also take over Bombardier’s interest in the the Regional Aircraft Securitization Program (a financing program), which is valued at about $180 million.
The deal is expected to close in the first half of next year and is subject to regulatory approval.
Bombardier will retain the CRJ production facility in Mirabel, Québec and will continue to assemble the current CRJ backlog on behalf of Mitsubishi. The company will also continue to supply components and spare parts The CRJ production is expected to conclude in the second half of 2020, following the delivery of the current backlog of aircraft.
The announcement also stated that “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.”
Seiji Izumisawa, President & CEO, Mitsubishi Heavy Industries
“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.”
The sale of the CRJ program will see Bombardier completely exit the commercial aircraft market having previously sold the C Series and Q400 programs. The company will now focus only on business jets.
Alain Bellemare, President and Chief Executive Officer, Bombardier Inc
“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. 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.”