Having received all required regulatory approvals, Airbus SE
(EPA:AIR), Bombardier Inc. (TSX:BBD.B) and Investissement Québec
(IQ) have agreed to close the C Series transaction effective on
July 1, 2018. The transaction by which Airbus will acquire a
majority stake in the C Series Aircraft Limited Partnership (CSALP)
was initially announced in October 2017. The Mirabel-based
partnership, which was originally established between Bombardier
and IQ, will benefit from Airbus’ global reach, scale, procurement
organization and expertise in selling, marketing and producing the
C Series – a state-of-the-art jet aircraft family in the 100-150
seat market.
Airbus will work with its partners Bombardier
and IQ to fully unlock the C Series’ potential and create
significant new value for customers, suppliers, employees,
shareholders and the communities in which the partnership operates.
The partnership’s head office, primary assembly line and related
functions will be based in Mirabel, Québec.
As previously announced, Bombardier will
continue with its current funding plan of CSALP. Due to the early
closing of the partnership, the terms of this plan are updated
according to the following schedule: Bombardier will fund the cash
shortfalls of CSALP, if required, during the second half of 2018,
up to a maximum of $225 million US; during 2019, up to a maximum of
$350 million US; and up to a maximum aggregate amount of $350
million US over the following two years, in consideration for
non-voting participating shares of CSALP with cumulative annual
dividends of 2%. Any excess shortfall during such periods will be
shared proportionately amongst CSALP’s Class A shareholders. Airbus
will consolidate CSALP effective from July 1, 2018 onwards. Further
financial information on the transaction will be provided later
this year.
The C Series program continues to ramp up.
Having delivered 17 aircraft in 2017, it is gearing up to double
its deliveries in 2018.
With the C Series’ demonstrated in-service
performance and the finalization of this partnership, the parties
expect increased demand to support a second C Series Final Assembly
Line in Mobile, Alabama, dedicated to supplying U.S.-based
customers. The C Series is positioned to capture a large percentage
of the estimated 6,000 aircraft needed in this market segment over
the next 20 years.
Airbus Chief Executive Officer Tom Enders said:
“This partnership extends our commitment to Québec and to all of
Canadian aerospace, and we are very glad to welcome so many C
Series teammates into the extended Team Airbus. The strength of the
entire Airbus organization will be behind the C Series. Not only
will that enable this outstanding aircraft to fulfill its market
potential, but we are convinced the addition of the C Series to our
overall aircraft product offering brings significant value to
Airbus, our customers and shareholders.”
“This marks the beginning of a very exciting new
chapter for the C Series and the Canadian Aerospace industry,” said
Alain Bellemare, Bombardier President and Chief Executive Officer.
“The C Series is widely recognized as the most advanced and
efficient aircraft in its class and this partnership will ensure
its commercial success. Airbus’ unmatched global scale, strong
customer relationships and operational expertise are necessary
ingredients for unleashing the full value of the aircraft.
Together, we will create tremendous new value and opportunities for
airlines, suppliers, shareholders and employees.”
“By combining the world’s most innovative and
efficient aerospace technology – designed and engineered in Québec
– with Airbus’ market and expertise, we are creating a brand new
dynamic in a promising segment,” noted Québec’s Deputy Premier,
Minister of Economy, Science and Innovation and Minister
responsible for the Digital Strategy Dominique Anglade. “Above all,
we are ensuring the growth of the C Series and securing the more
than 2,000 jobs attached to it in Mirabel. In addition to
maintaining the C Series’ head office, engineering and R&D
activities in Québec, this partnership positions Montréal as
Airbus’ largest research and development centre outside Europe,
representing tremendous opportunities for our entire aerospace
industry.”
“The C Series team in Québec is proud to
participate in this opportunity to drive the success of this
amazing aircraft,” said Philippe Balducchi, CEO of the C Series
partnership. “Our teams have worked tirelessly to merge cultures
and bring operations together well ahead of schedule and are
confident in our ability to make this win-win partnership a
thriving commercial success. The composition of the C Series
leadership team reflects our principles of bringing together the
best talent that both sides have to offer. We are ready to turn
outward and help our customers get their hands on the hottest
aircraft in its segment.”
About BombardierWith over 69,500 employees
across four business segments, Bombardier is a global leader in the
transportation industry, creating innovative and game-changing
planes and trains. Our products and services provide world-class
transportation experiences that set new standards in passenger
comfort, energy efficiency, reliability and safety.
Headquartered in Montreal, Canada, Bombardier
has production and engineering sites in 28 countries across the
segments of Transportation, Business Aircraft, Commercial Aircraft
and Aerostructures and Engineering Services. Bombardier shares are
traded on the Toronto Stock Exchange (BBD). In the fiscal year
ended December 31, 2017, Bombardier posted revenues of $16.2
billion US. News and information are available at bombardier.com or
follow us on Twitter @Bombardier.
About AirbusAirbus is a global leader in
aeronautics, space and related services. In 2017 it generated
revenues of € 59 billion restated for IFRS 15 and employed a
workforce of around 129,000. Airbus offers the most comprehensive
range of passenger airliners from 100 to more than 600 seats.
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.
Contacts for the media
Airbus |
|
|
Marcella
Cortellazzi (Canada) |
+ 34 607
604 215 |
marcella.cortellazzi@airbus.com |
Clay
McConnell (USA) |
+1 571 278
0612 |
clay.mcconnell@airbus.com |
Matthieu
Duvelleroy |
+33 6 29 43
15 64 |
matthieu.duvelleroy@airbus.com |
Martin
Aguera |
+49
175 227 4369 |
martin.aguera@airbus.com |
Sean Lee
(Asia-Pacific) |
+65 96 54
57 61 |
sean.lee@airbus.com |
|
|
|
Bombardier |
|
|
Simon
Letendre |
+1 514 861
2650 |
simon.letendre@bombardier.com |
FORWARD-LOOKING STATEMENTS
This press release includes forward-looking
statements, which may involve, but are not limited to: statements
with respect to our 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 expected impact of the
legislative and regulatory environment and legal proceedings on our
business and operations; available liquidities and ongoing review
of strategic and financial alternatives the impact and expected
benefits of the transaction with Airbus described herein, on our
operations, infrastructure, capabilities, development, growth and
other opportunities, geographic reach, scale, footprint, financial
condition, access to capital and overall strategy; and the impact
of such transaction on our balance sheet and liquidity
position.
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. Forward-looking statements are presented for
the purpose of assisting investors and others in understanding
certain key elements of our current objectives, strategic
priorities, expectations and plans, and in obtaining a better
understanding of our 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 management to make assumptions and are subject to important
known and unknown risks and uncertainties, which may cause our
actual results in future periods to differ materially from forecast
results set forth in forward-looking statements. While management
considers these assumptions to be reasonable and appropriate based
on information currently available, there is risk that they may not
be accurate. The assumptions underlying the forward-looking
statements made in this press release in relation to the
transaction with Airbus discussed herein include the following
material assumptions; the fulfillment and performance by each party
of its obligations pursuant to the transaction agreement and future
commercial agreements and absence of significant inefficiencies and
other issues in connection therewith; the realization of the
anticipated benefits and synergies of the transaction in the
timeframe anticipated; our ability to continue with our current
funding plan of CSALP and to fund, if required, any cash
shortfalls; adequacy of cash planning and management and project
funding; and the accuracy of our assessment of anticipated growth
drivers and sector trends. For additional information 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 Overview,
Business Aircraft, Commercial Aircraft, Aerostructures and
Engineering Services and Transportation in the MD&A of our
financial report for the fiscal year ended December 31, 2017.
With respect to the transaction with Airbus
discussed herein specifically, certain factors that could cause
actual results to differ materially from those anticipated in the
forward-looking statements include, but are not limited to, the
failure by either party to satisfy and perform its obligations
pursuant to the transaction agreement and future commercial
agreements and/or significant inefficiencies and other issues
arising in connection therewith; the impact of the announcement of
the transaction on our 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; our ability
to continue with our current funding plan of CSALP and to
fund, if required, the cash shortfalls; inadequacy of cash planning
and management and project funding. Certain other factors that
could cause actual results to differ materially from those
anticipated in the forward-looking statements 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, and the rail industry; trade
policy (including potential changes to or the termination of the
existing North American Free Trade Agreement between Canada, the
U.S. and Mexico currently in discussion); 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 MD&A of our financial
report for the fiscal year ended December 31, 2017.
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 us or that we presently believe are not material
could also cause actual results or events to differ materially from
those expressed or implied in our forward-looking statements. In
addition, there can be no assurance that the anticipated strategic
benefits and operational, competitive and cost synergies of the
transaction with Airbus will be realized in their entirety, in part
or at all. The forward-looking statements set forth herein reflect
management’s expectations as at the date of this report and are
subject to change after such date. Unless otherwise required by
applicable securities laws, we 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.
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