MONTREAL _ Bombardier Inc. announced Tuesday a deal to sell its regional jet program to Mitsubishi Heavy Industries Ltd. for US$550 million.
Bombardier chief executive Alain Bellemare said the agreement represents the completion of the transformation of the company’s aerospace business.
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“With our aerospace transformation now behind us, we have a clear path forward and a powerful vision for the future,” Bellemare said in a statement.
“Our focus is on two strong growth pillars: Bombardier Transportation, our global rail business, and Bombardier Aviation, a world-class business jet franchise with market-defining products and an unmatched customer experience.”
Mitsubishi, which will also assume liabilities totalling about US$200 million, will acquire the maintenance, support, refurbishment, marketing and sales activities for the CRJ Series aircraft.
The agreement includes the related services and support network located in Montreal and Toronto and its service centres in Bridgeport, W.Va., and Tucson, Ariz.
Mitsubishi chief executive Seiji Izumisawa said the deal is an important step towards building a strong, global aviation capability.
“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,” Izumisawa said.
The CRJ production facility in Mirabel, Que., will remain with Bombardier, which will also continue to supply components and spare parts.
Bombardier will assemble the current CRJ backlog on behalf of Mitsubishi with production expected to be completed in the second half of 2020.
Bombardier will also retain roughly US$400 million in liabilities representing a portion of the credit and residual value guarantees.
The deal is expected to close in the first half of next year, subject to regulatory approvals and customary closing conditions.
© 2019 The Canadian Press