Airbus SE (EADSY) will take a majority stake in Bombardier Inc's (BDRBF) C-Series jetliner division, the group said late Monday in Paris, as the Canadian group continues to grapple with the United States over accusations of unfair state support from the Canadian government.
The two companies will establish a unit called CSeries Aircraft Limited Partnership, in which Airbus will take a no-cost stake of 50.01%, to build new C-Series lines once the deal is approved by the Canadian government. Innovation Minister, Navdeep Bains, said late Monday that "on the surface", the agreement "would help position the CSeries for success".
"This is a win-win for everybody," said Airbus CEO Tom Enders. "The C Series, with its state-of-the-art design and great economics, is a great fit with our existing single-aisle aircraft family and rapidly extends our product offering into a fast growing market sector. I have no doubt that our partnership with Bombardier will boost sales and the value of this programme tremendously."
"Not only will this partnership secure the C Series and its industrial operations in Canada, the U.K. and China, but we also bring new jobs to the U.S. Airbus will benefit from strengthening its product portfolio in the high-volume single-aisle market, offering superior value to our airline customers worldwide," he added.
Airbus shares were marked 2.7% higher in the opening hour of trading in Paris, the biggest gain in more than three weeks, and changing hands at €79.24 each.
Last month, the U.S. Commerce Department said it will impose duties on C-Series jets after a complaint from rival Boeing Co. (BA) - Get Report that the Canadian group receives unfair government support.
The 219.63% duty on new commercial jets made by Bombardier and sold in the United States would effectively triple the $80 million base cost of the C-Series and likely lead to its scrapping. Montreal-based Bombardier called the ruling "absurd" and vowed to challenge it through the International Trade Commission.
The ruling has a British political dimension, as well, in that it could put as many as 4,000 jobs in Belfast, Northern Ireland, where parts of the C-Series are made, at risk and potentially threaten the fragile coalition government Prime Minister Theresa May brokered earlier this year with members of Northern Ireland's Democratic Unionist Party (DUP).
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