You are here: Home » Reuters » News
Business Standard

Airbus set to close deal for majority stake in Bombardier CSeries

Reuters 

By Allison and Rama Raman

(Reuters) - SE is set to close a deal to take a controlling stake in Bombardier Inc's jetliner program, effective July 1, the companies said on Friday, in a move expected to kickstart the European planemaker's ability to put its marketing and cost-cutting muscle into the Canadian plane program.

Bombardier agreed in October to sell a 50.01 percent stake in its flagship commercial jet for a symbolic Canadian dollar, as the plane program battled sluggish sales and low production, which made it harder to keep a lid on costs.

Airbus, by contrast, will be able to offer airlines deals by packaging the with its own jets and is expected to use its purchasing prowess to drastically cut the price of parts, along with improving efficiencies internally.

Bombardier will now own about 31 percent, while Investissement Quebec, the investment arm of the province of Quebec, will hold a 19 percent stake.

Bombardier on Friday raised its guidance for 2018 consolidated earnings before interest and tax by $100 million to a range of between $900 million and $1 billion, to reflect the separation of the jetliner program.

Bombardier also said it cut its revenue guidance by $500 million to $16.5 billion to $17 billion. The company added that its CSeries results will no longer be consolidated in its results from July 1.

The government, through its financing arm, took a 49 percent stake in the CSeries program in 2015 for $1 billion. Quebec's share, most recently worth 38 percent, slipped to 19 percent following the deal with

The deal was announced at a time when Bombardier was locked in a trade dispute with U.S. planemaker

The dispute ended in March when Boeing said it will not appeal a U.S. trade commission ruling that allows Bombardier to sell its CSeries in the without hefty duties.

Boeing is now holding its own tie-up talks with Bombardier's Brazilian rival The closing allows Airbus' sales team to promote the CSeries during campaigns to carriers such as and Ethiopian Airlines, with the European planemaker expected to boost orders and change the plane's name to an Airbus brand.

(Additional reporting by in Bengaluru and Tim Hepher in Sydney; Editing by and Patrick Graham)

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

First Published: Fri, June 08 2018. 16:07 IST
RECOMMENDED FOR YOU