Airbus set to close deal for majority stake in Bombardier Cseries
Logo of Airbus is pictured at the Airbus A380 final assembly line at Airbus headquarters in Blagnac near Toulouse, France, March 21, 2018. Photograph: (Reuters)
Airbus SE is set to close a deal to take a controlling stake in Bombardier Inc's CSeries 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 Airbus a 50.01 per cent 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 CSeries 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 per cent, while Investissement Quebec, the investment arm of the province of Quebec, will hold a 19 per cent stake.
The Quebec government, through its financing arm, took a 49 per cent stake in the CSeries program in 2015 for $1 billion. Quebec's share, most recently worth 38 per cent, slipped to 19 per cent following the deal with Airbus.
The deal was announced at a time when Bombardier was locked in a trade dispute with U.S. planemaker Boeing Co.
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 United States without hefty duties.
Boeing is now holding its own tie-up talks with Bombardier's Brazilian rival Embraer SA. The closing allows Airbus' sales team to promote the CSeries during campaigns to carriers such as Grupo Aeromexico and Ethiopian Airlines, with the European planemaker expected to boost orders and change the plane's name to an Airbus brand.