Bombardier agrees to sell Northern Ireland operations to Spirit AeroSystems for $1.1bn.
Companies proceed to close the deal.
Bombardier
Bombardier (TSE: BBD.B) is a manufacturer of regional airlines, rail train sets and public transport equipment.
Although the company is based in Canada, it owns a Belfast based aerospace business.
The Belfast based aerospace business owned by Bombardier is the biggest manufacturer in Northern Ireland.
Consequently, the business is a crucial asset in the United Kingdom aerospace manufacturing sector.
The primary focus of Bombardier is manufacturing engine systems as well as wings.
Furthermore, Bombardier sells engine systems and wings to customers such as Airbus (EPA: AIR) and Rolls-Royce (LON: RR).
Bombardier started its Northern Ireland operations in the 1930s.
Currently, Northern Ireland operations employ more than 3,600 employees.
Under its Northern Ireland operations, Bombardier operates in Belfast, Dunmurry and Newtownards.
Northern Ireland Operations
Bombardier announced its decision to put Northern Ireland operations on sale in May.
The company hopes to sell its Northern Ireland operations.
By doing so, it will shift its focus to manufacturing trains and business aircrafts.
After five months of remaining on sale, Bombardier agreed on a $1.1bn deal with Spirit AeroSystems.
The $1.1bn deal has two components.
Spirit AeroSystems pays $500m to purchase Northern Ireland operations.
Additionally, Spirit AeroSystems pays $700m of liabilities.
Subsequently, Spirit AeroSystems and Bombardier hope to close the deal by 2020.
Spirit AeroSystems
Spirit AeroSystems is the world’s largest first-tier aerosystems manufacturer.
Although the company is based in Kansas, United States, it operates global branches including one in Scotland.
Spirit AeroSystems buys Northern Ireland operations with the hope that it will help the company increase its annual revenue.
Spirit AeroSystems believes that Northern Ireland operations have an attractive growth potential.
Strategic Purchase
Spirit AeroSystems supplies products to Airbus and Boeing (LON: BOE).
Purchasing Northern Ireland operations of Bombardier is a part of Spirit AeroSystems’ strategy.
Spirit AeroSystems’ long term strategy is to expand its relations with Airbus and Boeing.
Spirit AeroSystems hopes to become the primary supplier of Airbus and Boeing.
The purchase is crucial to Spirit AeroSystems long term strategy.
Spirit AeroSystems hopes to offer workforce stability as well as a long term business plan focused on growth in Northern Ireland.