Mitsubishi Heavy Industries to acquire Bombardier CRJ program

Mitsubishi Heavy Industries Ltd. (MHI) will acquire Bombardier Inc.’s Canadair Regional Jet (CRJ) program for $550 million in cash and the assumption of approximately $200 million in liabilities. Also, Bombardier's interest in the Regional Aircraft Securitization Program (RASPRO), valued at approximately $180 million, will be transferred to MHI.

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, West Virginia; and Tucson, Arizona, as well as the type certificates.

This acquisition complements MHI's existing commercial aircraft business that inculdes the development, production, sales and support of the Mitsubishi SpaceJet [formerly known as the MRJ] commercial aircraft family. The maintenance and engineering capabilities of the CRJ program will further enhance critical customer support functions, a strategic business area for MHI in the pursuit of future growth.

Seiji Izumisawa, President & CEO of MHI, commented, "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."

Izumisawa concluded, "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," said Alain Bellemare, Bombardier Inc. president and CEO. "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."

Bellemare continued, "With our aerospace transformation now behind us, we have a clear path forward and a powerful vision for the future." The company will now seek to grow Bombardier Transportation, its global rail business, and its Bombardier Aviation business jets.

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.

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