DGAP-Adhoc: Airbus SE: Airbus and Bombardier Announce C Series Partnership

DGAP-Ad-hoc: Airbus SE / Key word(s): Agreement 
Airbus SE: Airbus and Bombardier Announce C Series Partnership 
 
17-Oct-2017 / 00:15 CET/CEST 
Disclosure of an inside information acc. to Article 17 MAR, transmitted by 
DGAP - a service of EQS Group AG. 
The issuer is solely responsible for the content of this announcement. 
 
*Ad-hoc release, 16 October 2017* 
 
*Airbus and Bombardier Announce C Series Partnership* 
 
- Airbus to acquire majority stake in the C Series Aircraft Limited 
Partnership 
 
- Partnership brings together two complementary product lines, with 100-150 
seat market segment expected to represent more than 6,000 new aircraft over 
the next 20 years 
 
- Combination of Airbus' global reach and scale with Bombardier's newest 
aircraft family to create significant value for customers, suppliers, 
employees and shareholders 
 
- Significant C Series production costs savings anticipated by leveraging 
Airbus' supply chain expertise 
 
- Commitment to Québec: C Series Aircraft Limited Partnership headquarters 
and primary assembly to remain in Québec, with the support of both 
companies' global supply chains 
 
- Airbus' global industrial footprint expands with the C Series Final 
Assembly Line in Canada, resulting in a positive impact on operations in 
Québec and across the country 
 
- Growing market for C Series results in second Final Assembly Line in 
Mobile, Alabama, serving U.S. customers 
 
*Amsterdam / Montreal, 16 October 2017* - Airbus SE (EPA: AIR) and 
Bombardier Inc. (TSX: BBD.B) are to become partners on the C Series aircraft 
programme. A corresponding agreement was signed today. The agreement brings 
together Airbus' global reach and scale with Bombardier's newest, 
state-of-the-art jet aircraft family, positioning both partners to fully 
unlock the value of the C Series platform and create significant new value 
for customers, suppliers, employees and shareholders. 
 
Under the agreement, Airbus will provide procurement, sales and marketing, 
and customer support expertise to the C Series Aircraft Limited Partnership 
(CSALP), the entity that manufactures and sells the C Series. At closing, 
Airbus will acquire a 50.01% interest in CSALP. Bombardier and 
Investissement Québec (IQ) will own approximately 31% and 19% respectively. 
 
CSALP's headquarters and primary assembly line and related functions will 
remain in Québec, with the support of Airbus' global reach and scale. 
Airbus' global industrial footprint will expand with the Final Assembly Line 
in Canada and additional C Series production at Airbus' manufacturing site 
in Alabama, U.S. This strengthening of the programme and global cooperation 
will have positive effects on Québec and Canadian aerospace operations. 
 
The single aisle market is a key growth driver, representing 70% of the 
expected global future demand for aircraft. Ranging from 100 to 150 seats, 
the C Series is highly complementary to Airbus' existing single aisle 
aircraft portfolio, which focuses on the higher end of the single-aisle 
business (150-240 seats). The world class sales, marketing and support 
networks that Airbus brings into the venture are expected to strengthen and 
accelerate the C Series' commercial momentum. Additionally, Airbus' supply 
chain expertise is expected to generate significant C Series production cost 
savings. 
 
Airbus is strongly committed to Canada and its aerospace sector with 
Canadian suppliers extending their access to Airbus' global supply chain. 
This new C Series partnership is set to secure jobs in Canada for many years 
to come. 
 
"This is a win-win for everybody! The C Series, with its state-of-the-art 
design and great economics, is a great fit with our existing single-aisle 
aircraft family and rapidly extends our product offering into a fast growing 
market sector. I have no doubt that our partnership with Bombardier will 
boost sales and the value of this programme tremendously," said Airbus Chief 
Executive Officer Tom Enders. "Not only will this partnership secure the C 
Series and its industrial operations in Canada, the U.K. and China, but we 
also bring new jobs to the U.S. Airbus will benefit from strengthening its 
product portfolio in the high-volume single-aisle market, offering superior 
value to our airline customers worldwide." 
 
"We are very pleased to welcome Airbus to the C Series programme," said 
Alain Bellemare, President and Chief Executive Officer of Bombardier Inc. 
"Airbus is the perfect partner for us, Québec and Canada. Their global 
scale, strong customer relationships and operational expertise are key 
ingredients for unleashing the full value of the C Series. This partnership 
should more than double the value of the C Series programme and ensures our 
remarkable game-changing aircraft realizes its full potential." 
 
"The arrival of Airbus as a strategic partner today will ensure the 
sustainability and growth of the C Series programme, as well as 
consolidating the entire Québec aerospace cluster. In the current context, 
the partnership with Airbus is, for us, the best solution to ensure the 
maintenance and creation of jobs in this strategic sector of the Québec 
economy," said Québec's Deputy Prime Minister, Minister of Economy, Science 
and Innovation and Minister responsible for Digital Strategy, Dominique 
Anglade. 
 
*Ownership Structure and Agreement Highlights* 
 
The C Series programme is operated by CSALP in respect of which Bombardier 
and IQ respectively hold approximately a 62% and a 38% interest. The 
Investment Agreement contemplates Airbus acquiring a 50.01% interest in 
CSALP. Airbus will enter into commercial agreements relating to (i) sales 
and marketing support services for the C Series, (ii) management of 
procurement, which will include leading negotiations to improve CSALP level 
supplier agreements, and (iii) customer support. At closing, there will be 
no cash contribution by any of the partners, nor will CSALP assume any 
financial debt. It also contemplates that Bombardier will continue with its 
current funding plan of CSALP and will fund, if required, the cash 
shortfalls of CSALP during the first year following the closing up to a 
maximum amount of US$350 million, and during the second and third years 
following the closing up to a maximum aggregate amount of US$350 million 
over both years, in consideration for non-voting participating shares of 
CSALP with cumulative annual dividends of 2%, with any excess shortfall 
during such periods to be shared proportionately amongst Class A 
shareholders. 
 
Airbus will benefit from call rights in respect of all of Bombardier's 
interest in CSALP at fair market value, with the amount for non-voting 
participating shares used by Bombardier capped at the invested amount plus 
accrued but unpaid dividends, including a call right exercisable no earlier 
than 7.5 years following the closing, except in the event of certain changes 
in the control of Bombardier, in which case the right is accelerated. 
Bombardier will benefit from a corresponding put right whereby it could 
require that Airbus acquire its interest at fair market value after the 
expiry of the same period. IQ's interest is redeemable at fair market value 
by CSALP, under certain conditions, starting in 2023. IQ will also benefit 
from tag along rights in connection with a sale by Bombardier of its 
interest in the partnership. 
 
The Board of Directors of CSALP will initially consist of seven directors, 
four of whom will be proposed by Airbus, two of whom will be proposed by 
Bombardier, and one of whom will be proposed by IQ. Airbus will be entitled 
to name the Chairman of CSALP. 
 
Subject to obtaining the required approval from the Toronto Stock Exchange, 
the transaction also provides for the issuance to Airbus, upon closing, of 
warrants exercisable to acquire up to 100,000,000 Class B Shares 
(subordinate voting) of Bombardier (representing approximately 5% of the 
aggregate issued and outstanding Class A Shares (multiple voting) and Class 
B Shares of Bombardier on a fully-diluted basis, and approximately 5% of the 
aggregate issued and outstanding Class A Shares and Class B Shares on a 
non-diluted basis), at an exercise price per share equal to the US$ 
equivalent of C$2.29, which represents the volume-weighted average price of 
the Class B Shares over the five trading days ending Friday, 13 October 
2017. The warrants will have a five-year term from the date of issue, will 
not be listed and will provide for market standard adjustment provisions, 
including in the event of corporate changes, stock splits, non-cash 
dividends, distributions of rights, options or warrants to all or 
substantially all shareholders or consolidations. 
 
The issuance of the warrants and their terms were negotiated between 
Bombardier and Airbus at arm's length and will not materially affect control 
of Bombardier. Security holder approval will be required under Toronto Stock 
Exchange rules due to the fact that the warrants will be issued later than 
45 days from the date upon which the exercise price was established. Such 
approval is expected to be obtained by way of written consent of 
shareholders holding more than 50% of the voting rights attached to all of 
Bombardier's issued and outstanding shares. 
 
The transaction has been approved by the Boards of Directors of both Airbus 
and Bombardier, as well as the Cabinet of the Government of Québec. The 
transaction remains subject to regulatory approvals, as well as other 
conditions usual in this type of transaction. There are no guarantees that 
the transaction will be completed and that the conditions to which it is 
subject would be met. Completion of the transaction is currently expected 
for the second half of 2018. 
 
*** 
 
*Contacts for the Media:* 
 
*Airbus:* 
 
*- *Stefan Schaffrath [phone] [e-mail] 
 
- Rod Stone [phone] [e-mail] 
 
- Clay McConnell [phone] [e-mail] 
 
*Bombardier:* 
*- *Simon Letendre [phone] [e-mail] 
 
- Nathalie Siphengphet [phone] 
[e-mail] 
 
*About Airbus:* 
Airbus is a global leader in aeronautics, space and related services. In 
2016 it generated revenues of EUR67 billion and employed a workforce of 
around 134,000. Airbus offers the most comprehensive range of passenger 
airliners from 100 to more than 600 seats and business aviation products. 
Airbus is also a European leader providing tanker, combat, transport and 
mission aircraft, as well as one of the world's leading space companies. In 
helicopters, Airbus provides the most efficient civil and military 
rotorcraft solutions worldwide. 
 
*About Bombardier:* 
Bombardier is the world's leading manufacturer of both planes and trains. 
Looking far ahead while delivering today, Bombardier is evolving mobility 
worldwide by answering the call for more efficient, sustainable and 
enjoyable transportation everywhere. Our vehicles, services and, most of 
all, our employees are what make us a global leader in transportation. 
 
Bombardier is headquartered in Montréal, Canada and our shares are traded on 
the Toronto Stock Exchange (BBD). In the fiscal year ended December 31, 
2016, we posted revenues of $16.3 billion. News and information are 
available at bombardier.com [1] or follow us on Twitter @Bombardier [2]. 
 
*Notes to editors:* 
 
*Airbus *will host an analyst conference call at 07:00 a.m. CEST on 17 
October, 2017 with Chief Executive Officer Tom Enders and Chief Financial 
Officer Harald Wilhelm. A live webcast and presentation will be available at 
www.airbus.com [3]. 
 
*Bombardier* will hold an analyst conference call on 16 October, 2017 at 
19:45 p.m. ET (01:45 a.m. CEST 17 October, 2017) with a live webcast and 
detailed presentation available via www.bombardier.com [4]. Present on the 
call will be Alain Bellemare, President and Chief Executive Officer and John 
Di Bert, Senior Vice President and Chief Financial Officer. 
 
*Forward-looking statements* 
 
*Airbus* 
 
This press release includes forward-looking statements, including in respect 
of the transaction pursuant to which Airbus would acquire a majority 
interest in the C Series aircraft programme and benefits expected to result 
from such transaction. Words such as "anticipates", "believes", "estimates", 
"expects", "intends", "plans", "projects", "may" and similar expressions are 
used to identify these forward-looking statements. Examples of 
forward-looking statements include statements made about strategy, ramp-up 
and delivery schedules, introduction of new products and services and market 
expectations, as well as statements regarding future performance and 
outlook. By their nature, forward-looking statements involve risk and 
uncertainty because they relate to future events and circumstances and there 
are many factors that could cause actual results and developments to differ 
materially from those expressed or implied by these forward-looking 
statements. These factors include but are not limited to: 
 
- Changes in general economic, political or market conditions, including the 
cyclical nature of some of Airbus' businesses; 
 
- Significant disruptions in air travel (including as a result of terrorist 
attacks); 
 
- Ability and timing to obtain regulatory and other approvals for the C 
Series aircraft programme transaction; 
 
- Ability to successfully integrate the C Series aircraft programme in 
collaboration with programme partners; 
 
- Ability to realize the expected benefits of the C Series aircraft 
programme transaction; 
 
- Currency exchange rate fluctuations, in particular between the Euro and 
the U.S. dollar; 
 
- The successful execution of internal performance plans, including cost 
reduction and productivity efforts; 
 
- Product performance risks, as well as programme development and management 
risks; 
 
- Customer, supplier and subcontractor performance or contract negotiations, 
including financing issues; 
 
- Competition and consolidation in the aerospace and defence industry; 
 
- Significant collective bargaining labour disputes; 
 
- The outcome of political and legal processes including the availability of 
government financing for certain programmes and the size of defence and 
space procurement budgets; 
 
- Research and development costs in connection with new products; 
 
- Legal, financial and governmental risks related to international 
transactions; and 
 
- Legal and investigatory proceedings and other economic, political and 
technological risks and uncertainties. 
 
As a result, Airbus' actual results may differ materially from the plans, 
goals and expectations set forth in such forward-looking statements. For a 
discussion of factors that could cause future results to differ from such 
forward-looking statements, see the Airbus "Registration Document" dated 4 
April 2017, including the Risk Factors section. Any forward-looking 
statement contained in this press release speaks as of the date of this 
press release. Except as required by law, Airbus undertakes no obligation to 
publicly revise or update any forward-looking statements in light of new 
information, future events or otherwise. 
 
*Bombardier* 
 
This press release includes forward-looking statements, which may involve, 
but are not limited to: statements with respect to Bombardier's objectives, 
guidance, targets, goals, priorities, market and strategies, financial 
position, beliefs, prospects, plans, expectations, anticipations, estimates 
and intentions; general economic and business outlook, prospects and trends 
of an industry; expected growth in demand for products and services; product 
development, including projected design, characteristics, capacity or 
performance; expected or scheduled entry-into-service of products and 
services, orders, deliveries, testing, lead times, certifications and 
project execution in general; competitive position; the completion, 
anticipated timing and use of the transactions described in this press 
release; the impact and expected benefits of the transaction on operations, 
infrastructure, opportunities, financial condition, access to capital and 
overall strategy; and the receipt of regulatory and other approvals required 
with respect to this transaction and the anticipated timing thereof. 
 
Forward-looking statements can generally be identified by the use of 
forward-looking terminology such as "may", "will", "shall", "can", "expect", 
"estimate", "intend", "anticipate", "plan", "foresee", "believe", 
"continue", "maintain" or "align", the negative of these terms, variations 
of them or similar terminology, as they relate to Bombardier and CSALP. 
Forward-looking statements are presented for the purpose of assisting 
investors and others in understanding certain key elements of Bombardier's 
current objectives, strategic priorities, expectations and plans, and in 
obtaining a better understanding of Bombardier's business and anticipated 
operating environment. Readers are cautioned that such information may not 
be appropriate for other purposes. 
 
By their nature, forward-looking statements require Bombardier's management 
to make assumptions and are subject to important known and unknown risks and 
uncertainties, which may cause Bombardier's and CSALP's actual results in 
future periods to differ materially from forecast results set forth in 
forward-looking statements. While Bombardier's management consider these 
assumptions to be reasonable and appropriate based on information currently 
available, there is risk that they may not be accurate. 
 
With respect to the transactions discussed herein specifically, certain 
factors that could cause actual results to differ materially from those 
anticipated in the forward-looking statements with respect to Bombardier 
include, but are not limited to, risks associated with the failure to 
receive or delay in receiving regulatory (including antitrust) or other 
approvals or otherwise satisfy the conditions to the completion of the 
transaction or delay in completing the transaction and uncertainty regarding 
the length of time required to complete the transaction; changes in the 
terms of the transaction; the failure by either party to satisfy its 
obligations pursuant to the transaction agreement; the impact of the 
announcement of the transaction on Bombardier's relationships with third 
parties, including commercial counterparties, employees and competitors, 
strategic relationships, operating results and businesses generally; the 
failure to realize, in the timeframe anticipated or at all, the anticipated 
benefits and synergies of the transaction. Certain other factors that could 
cause actual results to differ materially from those anticipated in the 
forward-looking statements with respect to Bombardier include, but are not 
limited to, risks associated with general economic conditions, risks 
associated with our business environment (such as risks associated with 
"Brexit", the financial condition of the airline industry, business aircraft 
customers, trade policy; increased competition; political instability and 
force majeure events or natural disasters), operational risks (such as risks 
related to developing new products and services; development of new 
business; the certification and homologation of products and services; 
fixed-price and fixed-term commitments and production and project execution; 
pressures on cash flows and capital expenditures based on project-cycle 
fluctuations and seasonality; our ability to successfully implement and 
execute our strategy and transformation plan; doing business with partners; 
product performance warranty and casualty claim losses; regulatory and legal 
proceedings; environmental, health and safety risks; dependence on certain 
customers and suppliers; human resources; reliance on information systems; 
reliance on and protection of intellectual property rights; and adequacy of 
insurance coverage), financing risks (such as risks related to liquidity and 
access to capital markets; retirement benefit plan risk; exposure to credit 
risk; substantial existing debt and interest payment requirements; certain 
restrictive debt covenants and minimum cash levels; financing support 
provided for the benefit of certain customers; and reliance on government 
support), market risks (such as risks related to foreign currency 
fluctuations; changing interest rates; decreases in residual values; 
increases in commodity prices; and inflation rate fluctuations). For more 
details, see the Risks and uncertainties section in Other in the 
Management's Discussion and Analysis (MD&A) of Bombardier's financial report 
for the fiscal year ended December 31, 2016. 
 
The assumptions underlying the forward-looking statements made in this press 
release in relation to the transaction include the following material 
assumptions: the satisfaction of all conditions of closing and the 
successful completion of the transaction within the anticipated timeframe, 
including receipt of regulatory (including antitrust) and other approvals 
and the accuracy of Bombardier's assessment of anticipated growth divers and 
sector trends. For additional information relating to Bombardier with 
respect to the assumptions underlying the forward-looking statements made in 
this press release, refer to the Strategic Priorities and Guidance and 
forward-looking statements sections in the MD&A of Bombardier's financial 
report for the fiscal year ended December 31, 2016. 
 
Readers are cautioned that the foregoing list of factors that may affect 
future growth, results and performance is not exhaustive and undue reliance 
should not be placed on forward-looking statements. Other risks and 
uncertainties not presently known to Bombardier or that Bombardier presently 
believe are not material could also cause actual results or events to differ 
materially from those expressed in its forward-looking statements. 
Accordingly, there can be no assurance that the proposed transaction will 
occur or that the anticipated strategic benefits and operational, 
competitive and cost synergies will be realized in their entirety, in part 
or at all. The forward-looking statements set forth herein reflect 
Bombardier's management's expectations as at the date of this press release 
and are subject to change after such date. Unless otherwise required by 
applicable securities laws, Bombardier expressly disclaim any intention, and 
assume no obligation to update or revise any forward-looking statements, 
whether as a result of new information, future events or otherwise. The 
forward-looking statements contained in this press release are expressly 
qualified by this cautionary statement. 
 
17-Oct-2017 CET/CEST The DGAP Distribution Services include Regulatory 
Announcements, Financial/Corporate News and Press Releases. 
Archive at www.dgap.de 
Language: English 
Company:  Airbus SE 
          P.O. Box 32008 
          2303 DA Leiden 
          Netherlands 
Phone:    [phone] 
Fax:      [phone] - 26481 
Internet: www.airbusgroup.com 
ISIN:     NL0000235190 
WKN:      938914 
Indices:  MDAX 
Listed:   Regulated Market in Frankfurt (Prime Standard); Regulated 
          Unofficial Market in Berlin, Dusseldorf, Hamburg, Hanover, Munich, 
          Stuttgart, Tradegate Exchange 
 
End of Announcement DGAP News Service 
 
619505 17-Oct-2017 CET/CEST 
 
 
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October 16, 2017 18:15 ET (22:15 GMT)