ChinaDaily
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| A booth of China Aviation Industry General Aircraft Co Ltd at an industrial show in Beijing. The company announced on Tuesday that it has signed an agreement to acquire Cirrus Industries Inc. [Photo / China Daily] |
BEIJING - China Aviation Industry General Aircraft Co Ltd (CAIGA)
announced on Tuesday that it has signed an agreement to acquire Cirrus
Industries Inc (Cirrus), the first acquisition of an aircraft maker that
a Chinese aviation company made in the United States and Europe.
Cirrus is the second-largest manufacturer of single-engine general
aviation aircraft in the world, behind Cessna, in terms of the number of
planes delivered. General aviation refers to all aviation excluding
military and commercial jets.
CAIGA President Meng Xiangkai said at a news conference CAIGA will
have 100 percent ownership of Cirrus, but neither side would disclose
the financial details of the transaction.
The deal is expected to be completed in April, but before that, it
needs be approved by both the US government's Committee on Foreign
Investment and China's National Development and Reform Commission and
the Ministry of Commerce, Meng said.
"I don't see any reason that the governments will not approve the
acquisition, because it is a strategic cooperation, a win-win deal that
will be conducive to Sino-US trade and industries," he said.
For Cirrus, the deal will help to cement its leading position in the general aviation industry, he added.
Brent Wouters, president and chief executive officer of Cirrus, said
in a news release, "This transaction will have a positive impact on our
business and our customers because we share a common vision with CAIGA
to grow our general aviation enterprise worldwide."
"CAIGA brings new resources that will allow us to expedite our
aircraft development programs and accelerate our global expansion," he
said, adding that the acquisition will allow Cirrus to jumpstart its
program for production of the Vision Jet and develop new products.
Cirrus has delivered nearly 5,000 piston-engine airplanes to 58
countries and regions over the last decade, but there are only
approximately nine Cirrus planes on the Chinese mainland, Meng said.
That number of planes will definitely grow rapidly during the coming
years, he said, adding that CAIGA will engage in promotion of three
Cirrus models and offer maintenance services on the mainland.
Moreover, CAIGA will also consider building a production line on the
mainland to produce Cirrus planes at a lower cost, if demand in China
and Southeast Asian countries warrants the move, he said.
The deal will also be highly beneficial to CAIGA, which will gain
more access to the US, the world's largest general aviation market,
which has more than two thirds of the world's total 330,000 general
aircraft, he said.
China is regarded one of the world's largest potential markets for
general aviation aircraft, because of its increasing population, large
geographical area and expanding infrastructure.
The country had 1,010 registered small aircraft at the end of 2010,
according to Li Jiaxiang, head of the Civil Aviation Administration of
China. Last week, he forecast that the general aircraft fleet will
"greatly increase" in the coming years following a proposal unveiled in
November to relax low-altitude airspace restrictions within the next
five to 10 years.
"I have confidence in the opening of the airspace, which will be
implemented eventually but will take time. This needs much patience,"
according to CAIGA's Meng.
He said the Chinese company is planning a market listing by 2015.
The acquisition of Cirrus will be an important step for its global
expansion plan, which aims to set up R&D, sales and service centers
in China, the US and Europe. The company currently has its manufacturing
base in Zhuhai, Guangdong province.
