Textron Aviation seen as suitor for Bombardier bizjet unit

The prospect of such a deal had aviation-industry observers and financial markets on alert as reports of a possible acquisition circulated widely and the companies’ stocks reacted with volatility.

As of February 5, numerous news outlets were putting their take on a report in The Wall Street Journal that negotiations have been proceeding for several weeks, although there was “no guarantee” that a deal would emerge that would help Bombardier, the debt-laden manufacturer of aircraft and trains, unload its balance-sheet burden.

Neither Bombardier nor Textron was addressing the question publicly, and the appearance of business as usual was enhanced on the news page of Bombardier’s website, where a January 31 news release noted the sale of two Learjet 75 aircraft—the latest Learjet—for medevac use in Poland.

However, the Learjet 75 line, valued at $6.7 billion, has been “fading,” said business-news outlet Bloomberg in a report that cited industry consultant Brian Foley’s analysis concluding that Textron would benefit from a consolidation of the “overcrowded” industry.

Foley recently sent AOPA a news release in which he speculated on emerging scenarios for a sale of the bizjet unit following Bombardier’s recent “bad day at the office” marked by its stock falling 32 percent “after the company warned that its second-quarter earnings would be substantially worse than forecast and said that it was reassessing its partnership with Airbus on the A220 and was pursuing alternatives to pay down debt.”

Mulling possible suitors, Foley dismissed General Dynamics (the Gulfstream unit), while weighing the possibility of interest from Embraer of Brazil—and noting that Bombardier’s Challenger and Global jet series “would fill a gaping hole” in the Embraer product lineup.

On the other hand, Embraer’s commercial line is the subject of an under-review deal with Boeing—and Boeing “is no longer the cash machine it once was due to the 737 MAX fiasco.”

“The last logical man standing in the potential buyer lineup would be Textron Aviation, the aerospace division of conglomerate Textron. Most of their product line is centered around the light and medium jet categories,” he wrote.

As for longshots, Foley mentioned defense contractors, Airbus, private equity, and investors from China as candidates of varying levels of interest—adding most colorfully that a buyer might not step forward publicly “until there was blood in the water.”