Shares of Bombardier soar following new deal

Shares of Bombardier up more than 20 per cent after singing CSeries deal with Airbus

Shares in Bombardier Inc. soared more than 20 per cent in early trading after the company gave up majority control of its CSeries aircraft program to European company Airbus Group.

Bombardier shares were up 53 cents at $2.89 on the Toronto Stock Exchange, shortly after trading began Tuesday.

The move followed an announcement of a partnership between the two aircraft manufacturers after the close of markets Monday.

Related: Compensation to Bombardier senior executives rose nearly 50 per cent last year

The agreement comes in the wake of an announcement by the United States of 300 per cent in preliminary duties on exports of the aircraft following a trade complaint by Boeing.

Under the deal, the CSeries headquarters and main assembly line will remain in the Montreal area, but a second line will be set up at Airbus’s plant in Alabama to meet demand from U.S. customers and avoid duties.

The partnership is expected to result in lower production costs, but Airbus won’t be paying any money for the stake or absorb Bombardier’s (TSX:BBD.B) large debt.

Related: Canada, U.K. using CETA as new trade model

Airbus will acquire a 50.01 per cent interest in the CSeries Aircraft Limited Partnership in exchange for access to its sales, logistics, procurement and support expertise. Bombardier will own 31 per cent and the Quebec government’s investment agency will hold 19 per cent.

Airbus can buy out Bombardier after 7.5 years and the Quebec government in 2023.

The Canadian Press

Just Posted

Sentencing postponed in Castor triple homicide

Jason Klaus and Josh Frank will appear in court again Feb. 14th

WATCH: Innisfail’s Berkley the bear celebrates first birthday

Discovery Wildlife Park’s newest Kodiak is excited for life this winter

Protect pets from canine flu

Sylvan Lake veterinarian spoke to the Sylvan Lake News about the canine flu

Skate safe floor installed

The Benalto train station’s transformation into a community recreation facility continues

WATCH: Innisfail’s Berkley the bear celebrates first birthday

Discovery Wildlife Park’s newest Kodiak is excited for life this winter

Back to work: U.S. government shutdown ends after Democrats relent

Short-term spending measure means both sides could see another shutdown stalemate in three weeks

Bell Media, NFL take appeal over Super Bowl ad rules to top court

At issue is a ban on substituting American ads with Canadian ones during the game’s broadcast

Sentencing postponed in Castor triple homicide

Jason Klaus and Josh Frank will appear in court again Feb. 14th

Cougar window shops at Banff grocery store

An RCMP officer spots a cougar outside an Alberta grocery store

$130K could get you on a dive to the Titanic

Hot summer ticket: $130K could get you on a dive to the Titanic off Newfoundland

UK’s Princess Eugenie, daughter of Prince Andrew, engaged

Princess Eugenie, the daughter of Prince Andrew and his ex-wife Sarah Ferguson, will marry Jack Brooksbank in Autumn 2018

German nurse charged with 97 more murders

Niels Hoegel, serving a life sentence for two murders, has been indicted in nearly 100 more killings.

Two men guilty in murders of Alberta family could face 75 years

The pair were found guilty of first-degree murder in the shooting deaths of Klaus’s parents and sister in a rural home near Castor, Alberta

Most Read