During the night of 16 to 17 October, Tom Enders, CEO of Airbus unexpectedly announced the takeover of the CSeries program of the Canadian aircraft manufacturer Bombardier.   The program aims at implementing a assembly line in China and in the United States. This decision appears as a breath of fresh air for the company for which such a program was too expensive considering the strong concurrence in the Northern American market with Boeing, leading to a lack of commands. Actually, in all likelihood Bombardier’s aircraft branch would not have survived without an injection of cash decided by the Canadian government in 2015. In parallel, this takeover consolidates Airbus in the American market, where the group is relatively weak with 30% of the market share.

About Bombardier

Founded in 1942 by Joseph-Armand Bombardier, and headquartered in Montreal, Quebec, Canada, Bombardier is a company specialized in transportation and aeronautics. Its first productions were snow vehicles used to travel across the snow covered Quebec.

After the invention of the first snowmobiles, the company kept sound and healthy, allowing it to be listed in the Montreal and Toronto stock exchanges.

After progressive purchases, the company expanded its manufacturing capacities to railroad technology, becoming the North America’s leader in rail transit in 1982 with a $1 billion US contract to build 825 cars for the New York Transit Authority, and to aeronautics by purchasing Canadair in 1986, the leading Canadian aircraft manufacturer.

It also expanded its purchases and activities in Europe, acquiring Belgian, French and British manufacturers during the 1980s.

The acquisition of Learjet in 1990 and de Havilland, a Boeing division in Canada, in 1992, allowed Bombardier to have a strong presence in the United States.

It has reported $16.3 billion of revenues during the 2016 fiscal year, with $2.6 billion in the commercial aircraft field. On october 20, 2017 at 11.30pm (GMT+1), each share valued 2.70 CAD.

About Airbus

Airbus is a European industrial group created in 2000 by the states of France and Spain, with Lagardère and Daimler. It is specialized in the aeronautic, aerospace and defence industries. It has its headquarters in Leyde in the Netherlands.

Through the History of the creation of a single European market, the aeronautic industries of the founding states have merged into a single company, Airbus. It has in 2016 133,782 employees around the world.

In 2016, it has reported $66.6 billion of revenues, which is a 3% rise compared to 2015, with $49.2 billion of this revenue in the field of aeronautics, representing 74% of the total.

At 11.30am (GMT+1) on october 20, 2017, each share has a value of 80.28 euros.

 Deal Structure

The takeover of the CSeries program, that was absolutely unexpected, is unanimously considered as a magistral poker strike led by Airbus. The aircraft group got 50,01% of the shares of the CSeries without transferring a dime. It only promised to bring all his industrial capacity to insure the success of the program. Bombardier even promised to absorb the loss of the program during two years, by a maximum of $350 millions.

The CS100 and CS300, that are the planes which will be produced thanks to this program, complete the range of products of Airbus for interregional flights, proposing a 36% cheaper alternative to Airbus A320.

Considering th[1]e competitivity of both planes, the american administration renegotiated the terms of the NAFTA by  deciding to raise taxes on Bombardier products by 300% in order “avoid a dumping”, that would have mainly affected Boeing. The CSeries program, that implements an assembly line in Alabama allows to bypass this tariff barrier. By the way it allows Airbus to have a stronger position in the American market. The American company Delta Airlines, that ordered 75 planes decided to withdraw after the considerable growth of the customs tariff imposed by the administration. In addition, Delta Airlines CEO, Edward Bastian, announced last month that the company will refuse to pay any cent for this antidumping tax. With the confirmation of a new center of production in Alabama, fostered by the industrial capacity of Airbus, Delta Airlines has announced its enthusiasm resulting from this deal.

Furthermore, CSeries program implies as well a spread of Airbus activity in the Chinese market, implementing a center of production in Tianjin, on the Chinese North Eastern coast. Airbus have already shown a strong interest in the region: a A320 assembly line have already existed for 10 years, raising the market shares of the company from 20% to 50% in the country. Furthermore, Bombardier have developed strong partnerships with Chinese companies notably Shenyang Aircraft Corporation which contributes to the production of the fuselages of the CSeries planes.

The American aircraft manufacturer Boeing is the great loser in this deal and the company immediately reacted by denouncing “a questionable deal between two heavily state-subsidised competitors to skirt the recent findings of the US government”[2] and by foreseeing to seize the competition authorities.


  • On the rivals: The main rival of Airbus and Bombardier worldwide, and especially in the American continent is Boeing. After the deal was made, the shares of Boeing passed from $259.7500 at 4pm EDT on october 16, to $257.5300 at 9.30 EDT on october 17.
  • For the Financial Times, this deal is said to be “a transaction of such artful commercial malevolence it deserves applause.”[3]
  • On the international relations: Boeing has announced that “the announced deal has no impact or effect on the pending proceedings at all. Any duties finally levied against the C Series will have to be paid on any imported C Series aeroplane or part, or it will not be permitted into the country.”[4] The tariffs wanted by the US government will surely
  • On the shares: The deal affected the market and the values of the shares of the 3 directly or indirectly involved companies. For Bombardier, the shares valued 2.38 CAD on october 16, and 2.87 CAD on october 17, after the announcement of the deal. For Airbus it passed from 78.650 euros, to 81.230 euros. Finally, for Boeing, it has the opposite phenomenon, with a drop from $259.7500 to $258.6200 during the same time.

Bombardier (up) and Boeing (down) shares values

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