aircanada014
Posts: 1224
Joined: Sun Oct 09, 2005 2:24 pm

Imagine Bombardier And Embraer Join Forces?

Thu Feb 09, 2006 4:45 am

Hello all


We've been talking about how good the EMB jets are and that Bombardiers Cseries dropped. Also we've been talking about the comfortable EMB vs CRJ 705/900 and that everyone prefer EMB over CRJs. Its a shame Bombardier can't come up with newer and improvement product but it would be nice down the road if they can. I was just thinking, just use your imagination. What would you think if Bombardier decides to partnership with EMB to create a new RJ in few years from now with seat ranges from 80-120 with good range up to 2500nm?. I would like to see BBD continue making RJs to compete or work together with Embraer. I hate to see their aerospace going down.

Your comments are appreciate please. No bashing thread for both companies please. Pros and Cons are ok.
 
PDPsol
Posts: 1125
Joined: Fri Feb 20, 2004 5:09 am

RE: Imagine Bombardier And Embraer Join Forces?

Thu Feb 09, 2006 9:58 am

AirCanada014,

While you are not the first person to suggest a hypothetical "partnership" between BBD and ERJ, this is the first time I have come accross this topic on a.net. There are a couple of alternatives one can contemplate [of course, there are many other variations one could consider]:

1. An acquisition of one company by another. A stock-for-stock deal would simply be a "merger", with the target's shareholders receiving ownership in the combined company.

2. Creation of a new company [a joint venture] dedicated to a new 110-130 seat commercial project with investments by both BBD and ERJ á-la CFM [with both GE and SNECMA as shareholders] or Airbus [both BAE and EADS are shareholders].

Option #1 appears rather unrealistic give the BBD's dreadful corporate governance and control by the Beaudoin/Bombardier families. Also, BBD's stock value is a disaster now and, even in a stock-for-stock deal, BBD's shareholders would obtain a small position in the combined firm.

Option #2 may be a remote possibility, but, what's the incentive for ERJ to do this? While BBD has made a failed effort to enter the 110-130 seat market with the C-Series, ERJ does not appear to be interested in challenging Boeing or Airbus.

So, while one could consider some sort of "partnership" between BBD and ERJ to further consolidation and create some scale and efficiencies in the process, such an arrangement does not appear likely in the near future.

Should Russia liberalize its aerospace company ownership laws [unlikely], perhaps BBD as well as investors from India and China, could invest directly in the RRJ project as a shareholder.

Who knows? Anything is possible.
 
User avatar
Devilfish
Posts: 5681
Joined: Tue Jan 24, 2006 7:52 am

RE: Imagine Bombardier And Embraer Join Forces?

Thu Feb 09, 2006 12:55 pm

Quoting Pdpsol (Reply 1):
a hypothetical "partnership" between BBD and ERJ

Only so we could continue to have A+B vs Br+E wars! But that would be lopsided, come to think of it - wouldn't it?
"Everyone is entitled to my opinion." - Garfield

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