Bombardier exploring divestiture of its aerospace business: Bloomberg

The embattled Canadian train and plane maker is weighing its options to reduce its footprint from the aerospace market. It is eyeing a sale as well as potential partnerships.

Bloomberg reported, Canadian airplane and train maker Bombardier Inc is exploring the sale of some of its operations, including its aerospace businesses.

The company is toying with the idea of divesting some of its assets, including its Q400 turboprop and CRJ regional-jet businesses, reported Bloomberg citing sources familiar with the matter at hand.

Simultaneously, Bombardier is also eyeing potential partnerships with other aerospace companies, including Airbus SE.

While Bombardier declined to comment on the report, Airbus responded by saying it does not comment on market rumors.

Aviation industry sources however have cast doubts on Airbus’ potential interest in Bombardier’s Q400 business since, it already has a 75% stake in the turboprop market and if it were to go ahead with the deal it would raise oncerns from anti-trust regulators.

In recent days, Bombardier’s aerospace business has come under presure from lackluster demand for its turboprops and regional jets as well as its trade dispute with Boeing Co. over the CSeries narrow-body jets.

The Trump Administration has imposed steep duties of 300% on Bombardier’s 110 to 130 seater CSeries jet following a complaint by Boeing that the Canadian company received subsidies and sold the planes to American carriers for “absurdly low” prices.

As per two sources familiar with the matter, Bombardier has recently held informal talks with potential Chinese companies with the goal of delivering an investment in the CSeries jets and improving the aircraft’s sales through better access to the fast-growing Chinese aviation market.

However, they have become entangled and complicated given the various agendas of the stakeholders, which includes Quebec’s provincial government that owns a 49% stake in the plane program.

“There are a lot of conditions that have to be met for these things to work,” said one of the sources. “Logic doesn’t win always.”

The sources preffered the cover of anonymity since the talks are private.

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