Mitsubishi Heavy Industries to buy CRJ regional programme from Bombardier
Mitsubishi Heavy Industries and Bombardier announced they have entered into a definitive agreement for Mitsubishi to buy Bombardier’s regional jet programme for US$550 million as well as the assumption of US$200 million in debt and the transfer of Bombardier’s net beneficial interest in the Regional Aircraft Securitisation Program (RASPRO), which is valued at approximately US$180 million.
The deal is expected to help subsidiary Mitsubishi Aircraft compete against other regional jet makers as it looks to launch its regional and recently renamed programme the MRJ SpaceJet. The deal will also see the Canadian company exit the commercial passenger aircraft business.
Mitubishi 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 centres located in Bridgeport, West Virginia, and Tucson, Arizona, as well as the type certificates. This was a key element lacking in Mitsubishi’s regional programme.
Seiji Izumisawa, president and CEO of Mitsubishi Heavy Industries, said: “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.”
“We are very pleased to announce this agreement, which represents the completion of Bombardier’s aerospace transformation,” said Alain Bellemare, president and CEO of Bombardier. “We are confident that (Mitsubishi’s) acquisition of the programme is the best solution for airline customers, employees and shareholders. We are committed to ensuring a smooth and orderly transition.”
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 Mitsubishi. 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 totalling approximately US$400 million. 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.