Mitsubishi Heavy Industries to acquire Canadair program from Bombardier Inc.

 

 

Mitsubishi Heavy Industries Ltd. (MHI; Tokyo, Japan) has announced that it is acquiring Bombardier Inc.’s (Montréal, Canada) Canadair regional jet program (CRJ). 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, W.Va., and Tucson, Ariz., as well as the type certificates.

The $550 million agreement includes the transfer of Bombardier's net beneficial interest in the Regional Aircraft Securitization Program (RASPRO), which is valued at approximately $180 million, to MHI.

According to MHI, the acquisition is complementary to the company’s existing commercial aircraft business, including the development, production, sales and support of the Mitsubishi SpaceJet commercial aircraft family. The maintenance and engineering capabilities of the CRJ program reportedly will enhance critical customer support functions for MHI as well. 

“This transaction represents one of the most important steps in our strategic journey to build a strong, global aviation capability,” says Seiji Izumisawa, president and CEO of MHI. “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 adds that MHI hopes the transaction and work with the CRJ program will expand the company’s presence in Canada.

“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,” says Alain Bellemare, president and CEO of Bombardier Inc. Bellemare adds that Bombardier’s focus going forward will be the growth of Bombardier Transportation and Bombardier Aviation.

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. The transaction is currently expected to close during the first half of 2020 and remains subject to regulatory approvals and customary closing conditions.