By Allison Lampert and Tim HepherMONTREAL/PARIS (Reuters) - Airbus SE <AIR.PA> said on Monday it would acquire a majority stake in Bombardier Inc's <BBDb.TO> CSeries programme in a deal that the Canadian plane-and-train-maker said would boost sales and position the company strategically against a potentially costly U.S. trade dispute with Boeing Co <BA.N>.The deal, which would come at no cost for Airbus, would give the European planemaker a 50.01 percent interest in CSeries Aircraft Limited Partnership (CSALP), which manufactures and sells the jets, the companies said.Airbus Chief Executive Tom Enders said the company has offered to assemble some of the narrowbody jets at its U.S. plant in Alabama for orders by American carriers. The U.S. assembly line would mean the 110 to 130 seat jets would not be subject to possible U.S. anti-subsidy and anti-dumping duties of 300 percent, Bombardier Chief Executive Alain Bellemare said at a press conference."There is a ton of strategic value in doing this deal," Bellemare said.Talks for the deal first started in August. Enders said the deal is different from an earlier round of talks in 2015, when Airbus abruptly ended negotiations, Reuters reported then. He said the plane is performing better."It's an entirely different situation," he said.Under the deal, Bombardier will own about 31 percent, while Investissement Québec, the investment arm of the province of Quebec, will hold 19 percent once the deal closes.Separately, Quebec's largest pension fund, which holds a 30 percent stake in Bombardier's rail division, said the decision "strengthens the company, improves its prospects for growth, and makes the company more robust over the long term, which is important to shareholders.”The deal also provides Airbus warrants exercisable to acquire up to 100 million Class B Shares of Bombardier, the companies said.The deal comes amid a trade dispute with U.S. rival Boeing Co over the C-Series jet. The U.S. government has slapped steep preliminary anti-subsidy duties on sales of the C-Series jets over that dispute.A Boeing spokesman were not immediately available for comment.Airbus will provide procurement, sales and marketing, and customer support expertise to CSALP, the companies said.There will be no cash contribution by any of the partners, nor will CSALP assume any financial debt, they said.Bombardier expects a $400 million loss in commercial aircraft this year, but has set a breakeven target for 2020. (Additional reporting by Ankur Banerjee in Bengaluru; Editing by Sriraj Kalluvila and Mary Milliken)
steve15 hours agoSo, Airbus is acquiring 50% of the C Series at no cost. That sounds a bit [or a lot] strange to me. The Canadian gov't finances the development of this craft, and now, at no cost, Airbus gets a 50% stake in any profits? How can anybody compete with that?
Mis16 hours agoI really like Boeing, but I don't think Boeing is winning this one.
Nubbins15 hours agoThe USA government overpays for all things Boeing but that's not subsidies. Yeah ok
Gujimuji14 hours agoCanadian are showing their middle finger to American government.
Scruff15 hours agoBoeing has so far tried to bail out a failed U.K. Airline, and now is getting nothing from suing bombardier. Leadership needs to be questioned for the horrible business decisions.
Nubbins16 hours agoNo product overlap and USA production, bummer for Boeing. Airbus made in the USA.
Ian15 hours agoI think Bombardier and Airbus just stuck it up Trump's #$%$ What a deal maker...
Nubbins15 hours agoDelta airlines wins too, c series will be made real close to delta home office 20% more efficient jet
Liam King15 hours agoThe biggest winners here are the US flying public. After a taste of this jet, customers will want to throw rocks at the 737 ....
Good luck, Airbus !!
Toula14 hours agoExcellent move for the EU and Canada.
Good luck, Airbus !!