Bombardier selling regional jet division to Mitsubishi

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A Bombardier CRJ900 aircraft flying for Delta Connection.
A Bombardier CRJ900 aircraft flying for Delta Connection.

Canada's Bombardier has entered into an agreement to sell its CRJ regional jet division to Mitsubishi Heavy Industries.

The Japanese company will purchase Bombardier's CRJ division for $550 million and will take on approximately $200 million in Bombardier's debt. The transaction, which is subject to regulatory approval, is expected to close during the first half of next year, the companies said Tuesday.

Mitsubishi said the acquisition would be complementary to its SpaceJet regional aircraft program, which expects to deliver its first regional jet next year. Under the deal, Mitsubishi is to acquire the maintenance, support, refurbishment, marketing, and sales activities for CRJ aircraft, including the related services and support network. 

"The CRJ program has been supported by tremendously talented individuals," Mitsubishi CEO Seiji Izumisawa said in in a prepared statement. "In combination with our existing infrastructure and resources in Japan, Canada and elsewhere, we are confident that this represents one effective strategy that will contribute to the future success of the Mitsubishi SpaceJet family."

Under the agreement, Bombardier will retain its CRJ production facility in Quebec. The company expects to conclude production of CRJ aircraft in the second half of 2020, following delivery of its current order backlog. 

With the sale of its regional aircraft division, Bombardier will focus its aerospace activities on business jets. In 2017 Bombardier made its first move away from the commercial jet market when it merged its C-Series aircraft with Airbus. Those aircraft have since been renamed the Airbus A220-100 and A220-300.

Mitsubishi rebranded its regional jet program with the SpaceJet name this month. The line includes the 88-seat M90, which has been on sale since 2008, and the newly announced 76-seat M100. 

The SpaceJet series will compete against the dominant regional aircraft market position of Embraer's E-Jets. Embraer is in the process of merging with Boeing.

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