MONTREAL (dpa-AFX) - Mitsubishi Heavy Industries, Ltd. (MHVYF.PK) agreed Tuesday to acquire the Canadair Regional Jet (CRJ) program from Bombardier Inc. (BBD_B.TO, BBD_A.TO) for a cash consideration of $550 million. This is payable to Bombardier upon closing, and the assumption by Mitsubishi of liabilities amounting to about $200 million.
Under the agreement, Bombardier's net beneficial interest in the Regional Aircraft Securitization Program (RASPRO), which is valued at about $180 million, will be transferred to Mitsubishi.
This acquisition is complementary to Mitsubishi's existing commercial aircraft business, in particular the development, production, sales and support of the Mitsubishi SpaceJet commercial aircraft family.
The CRJ production facility in Mirabel, Québec will remain with Bombardier. Bombardier will also retain certain liabilities representing a portion of the credit and residual value guarantees totaling about $400 million, payable by Bombardier over the next four years.
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.
The transaction is currently expected to close during the first half of 2020 and remains subject to regulatory approvals and customary closing conditions. The agreement also contemplates a reverse break fee payable by MHI under certain circumstances.
The deal will enable Mitsubishi to transform and lead the underserved regional jet business, with bolstered customer support services. It also completes Bombardier's aerospace transformation and refocus on business aviation.
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