Kyoto, Japan, October 6, 2023 – Japan’s Nidec Corporation (OTC: NJDCY) and Brazil’s Embraer (NYSE: ERJ) welcome the unconditional approval from all necessary regulatory authorities for the establishment of their joint venture, Nidec Aerospace LLC. The transaction combines the complementary synergies and distinct areas of expertise of two world-class engineering conglomerates to develop Electric Propulsion Systems (EPS) for the aerospace sector.
Vincent Braley, chief of staff for Nidec’s Motion and Drives business in the United States, has been appointed the CEO of Nidec Aerospace with immediate effect. Braley brings broad experience in business development and management to his new role to lead the joint venture’s future growth.
Unveiled at the Paris Air Show in June, the business combination aims to unlock new opportunities by providing an agnostic portfolio of products and services worldwide, driven initially by the growth of the Urban Air Mobility (UAM) industry. The UAM market is emerging and could create a USD 1.5 trillion market by 2040, according to Morgan Stanley Research.
FILE PHOTO: A Malaysia Airlines plane is seen at Kingsford Smith International Airport in Sydney
KUALA LUMPUR (Reuters) – Privately held Golden Skies Ventures (GSV) has made a $2.5 billion offer to fully take over the holding company of ailing state carrier Malaysia Airlines, with financing from a European bank, its executives told Reuters on Monday.
GSV, which was set up by former Malaysia Airlines officials and professionals with aviation experience, made the proposal a month ago, as airlines around the world were hammered by travel restrictions following the coronavirus pandemic.
“We have secured in excess of $2.5 billion from the bank. We will take about three to four months to get the long-term financing,” Chief Executive Shahril Lamin told Reuters in a phone interview.
GSV said it also has a commitment from a Japanese private equity firm to inject immediate funds into the aviation group through an equity deal.
It declined to name the firms involved, adding it was in talks with other foreign banks and private equity firms for further funding.
GSV has submitted its proposal to Morgan Stanley which has been hired by the aviation group’s sole owner, sovereign wealth fund Khazanah Nasional Bhd.
Sources have previously said Japan Airlines Co Ltd, domestic carriers AirAsia Group Bhd and Malindo Air have shown interest in Malaysia Airlines.
GSV said it would assume most of the airline’s debt that is being held by the government in outstanding Islamic bonds.
Khazanah and Morgan Stanley did not immediately respond to emailed requests for comment.
GOLDEN SHARE
The proposal includes keeping the government’s so-called golden share which allows it majority voting rights and maintains Malaysia Airlines’ flag carrier status.
GSV expects it will have ample liquidity to help the airline operate comfortably for up to 18 months.
It intends to reinstate Malaysia Airlines as a premium long-haul airline by expanding its flight network and maximising utilisation of its 81-plane fleet. It also plans to keep other business units such as the budget airline, cargo freighter and maintenance repair and overhaul unit.
“It’s still a viable venture, it has inherent strengths. We are saying we won’t lay off the 13,000 frontline employees and we are not going to asset-strip the airline,” Deputy Chief Executive Ravindran Devagunam said.
The firm aims to achieve positive earnings before interest, taxes, depreciation and amortisation within three years of taking over, and targets 15 billion ringgit ($3.5 billion) in revenue in 2025.
Plans for a listing or possible listing of its units are on the cards in three to five years, they said.
Ravindran said the firm is banking on pent-up travel demand when the coronavirus is contained. “Regardless of how long (the virus) will take this year, we are looking at an uptick in the business from summer 2021.”
($1 = 4.3450 ringgit)
(Reporting by Liz Lee; Editing by David Holmes and Edwina Gibbs)
CHICAGO (Reuters) – United Airlines Holdings Inc <UAL> on Tuesday beat Wall Street estimates for quarterly profit and held to its 2020 profit target, with a turnaround strategy overseen by its outgoing CEO underpinning growth even as the Boeing 737 MAX remains grounded.
Chicago-based United is one of three U.S. airlines cancelling more than 1,000 monthly flights in a hit to profits as the 737 MAX remains grounded following two deadly crashes in Indonesia and Ethiopia. Boeing Co <BA> said on Tuesday it does not expect approval for the 737 MAX’s return to service until mid-year, later than previously forecast.
While United has warned of a hit from the MAX grounding, it did not disclose any estimated financial impact from the fallout and stood by its full-year adjusted EPS range of $11 to $13.
Total operating revenue rose 3.8% to $10.89 billion, boosted by strong travel demand and Chief Executive Oscar Munoz’s three-year strategy to build up the airline’s flight connections through its main U.S. hubs. United President Scott Kirby will succeed Munoz as CEO later this year.
Revenue per mile flown, a closely watched industry measurement, rose 0.8% in the fourth quarter and United forecast similar growth in the first quarter given solid bookings.
However, unit costs excluding fuel and profit-sharing expenses, a concern for investors in a year of contract negotiations with pilots, rose 2.7%.
United had already announced a non-cash impairment charge of $90 million in the fourth quarter related to its Hong Kong routes, following anti-government protests in the city.
Shares of United closed 4.4% lower at $85.79 before the earnings release, tracking sharp declines for U.S. airline and travel stocks on concerns over the Wuhan coronavirus in China, which J.P.Morgan analyst Jamie Baker said poses a near-term overhang for airlines.
United did not comment on the outbreak in its results but separately said there is no impact on its operations and it remains in close contact with U.S., Chinese and other Asian authorities on safety.
United management will host a conference call to discuss results on Wednesday at 10:30 a.m. EST (1630 GMT).
Adjusted net income rose to $676 million, or $2.67 per share, in the fourth quarter to Dec. 31, from $657 million a year earlier, topping a Wall Street consensus forecast for $2.65 per share.
Fellow U.S. MAX operators Southwest Airlines Co <LUV> and American Airlines Group Inc <AAL> are due to report quarterly results on Thursday.
The three airlines are scheduling without the MAX until early June though that timeline will likely need to be pushed back following Tuesday’s guidance from Boeing.
United, which had 14 737 MAX jets in its fleet at the time of the grounding, said it plans to take delivery of 28 MAX variants in 2020 depending on U.S. regulatory approval and Boeing’s subsequent pace of production and deliveries.
Among other aircraft orders, it expects to take delivery of two Boeing 777-300’s and 15 Boeing 787’s in 2020 but has decided to assign its purchase obligations for 20 Embraer 175’s to one of its regional partners once each jet is delivered.
(Reporting by Tracy Rucinski in Chicago; Additional reporting by Dominic Roshan K L in Bengaluru; Editing by Matthew Lewis)
An American Airlines Boeing 737 MAX 8 flight approaches to land at Reagan National Airport in Washington
CHICAGO, Sept. 6, 2019 /PRNewswire/ — United Airlines will present at the Morgan Stanley 7th Annual Laguna Conference on Thursday, Sept. 12. United Airlines’ President Scott Kirby will present at the conference beginning at 12:15 p.m. PT / 3:15 p.m. ET.
The live webcast will be available on the investor relations section of United’s website at ir.united.com. The company will archive the audio webcast on the website within 24 hours of the presentation, and the webcast will be available for a limited time.
Every customer. Every flight. Every day.
In 2019, United is focusing more than ever on its commitment to its customers, looking at every aspect of its business to ensure that the carrier keeps customers’ best interests at the heart of its service. In addition to today’s announcement, United recently announced that luxury skincare line Sunday Riley will make products exclusively for United customers to experience in amenity kits, released a re-imagined version of the most downloaded app in the airline industry, introduced ConnectionSaver, a new tool dedicated to improving the experience for customers connecting from one United flight to the next and made DIRECTV free for every passenger on 211 aircraft, offering more than 100 channels on seat back monitors on more than 30,000 seats.
PEORIA, Ill., July 19, 2019 /PRNewswire/ — Pioneer Railcorp (OTC: PRRR, “Pioneer”), a railroad holding company that owns short-line railroads and several other railroad-related businesses including a railroad equipment company and a contract switching services company, today announced that its shareholders have approved the previously announced definitive merger agreement with BRX Transportation Holdings, LLC (“BRX”), an entity formed by Brookhaven Rail Partners (“Brookhaven”), Related Infrastructure (“Related”) and Stephens Capital Partners LLC (“Stephens”). The proposal to approve the merger agreement and the transactions contemplated thereby was approved with voting results as follows:
Under the terms of the merger agreement, BRX will acquire through merger all of the outstanding shares of Pioneer’s Class A common stock. Shareholders other than Heartland will receive $18.81 per share in cash and the Heartland shares will be cancelled without consideration.
Consummation of the merger remains subject to various closing conditions, including operating performance by Pioneer within a specified working capital floor and debt ceiling. Subject to satisfaction of the closing conditions, the transaction is expected to close in late July 2019. Upon closing of the transaction, Pioneer will become a wholly-owned subsidiary of BRX and its Class A common stock will cease trading on the OTC Markets.
Arnold & Porter is acting as legal advisor to BRX in this transaction. BMO Capital Markets is serving as exclusive financial advisor to Pioneer in connection with this transaction and Briggs and Morgan, P.A. is acting as Pioneer’s legal advisor.
About Pioneer Pioneer Railcorp is the parent company of 15 short-line common carrier railroad operations, an equipment leasing company, two service companies and a contract services switching company. Pioneer and its subsidiaries operate in the following states: Alabama, Arkansas, Georgia, Illinois, Indiana, Iowa, Kansas, Michigan, Mississippi, Ohio, Pennsylvania and Tennessee. For more information on Pioneer, please visit www.Pioneer-Railcorp.com
About Brookhaven Brookhaven Rail Partners is an affiliate of Denver-based Brookhaven Capital Partners, a privately held, real estate and infrastructure investment and management firm. Brookhaven and its principals have a 25-year track record of investing in, operating and developing critical transportation assets that support industry, and promote new economic development, community investment, and job creation. For more information on Brookhaven, please visit www.BrookhavenPartners.com
July 1 (Reuters) – Canada’s Brookfield Asset Management Inc and Singaporean sovereign wealth fund GIC on Monday agreed to buy U.S. freight railroad owner Genesee & Wyoming Inc for about $6.4 billion in cash.
Brookfield and GIC’s offer of $112 per share represents a premium of 12 percent to Genesee’s closing price on Friday. Genesee shares were up about 8 percent in trading before the bell.
Including debt, the deal is valued at about 8.4 billion, the companies said in a statement.
Genesee & Wyoming’s revenue have increased at a compound annual growth rate of 16.8% since it floated in the stock market in 1996, rising to $2.3 billion in 2018 from $77.8 million, according to Genesee & Wyoming’s latest annual report.
The company owns a portfolio of 120 short-line railroads, predominantly in North America, with operations in Europe and Australia.
Reuters had reported on the deal on Sunday, citing sources.
The deal, which is expected to close by year end or early 2020, would be the latest big leveraged buyout by Brookfield, which agreed last year to buy Johnson Controls International Plc’s power solutions business for about $13 billion.
Citigroup Global Markets Inc served as the financial adviser to Brookfield and GIC, while BofA Merrill Lynch and Morgan Stanley & Co LLC advised Genesee.
(Reporting by Ankit Ajmera in Bengaluru; Editing by Anil D’Silva)
United Technologies, Raytheon to create $120 billion aerospace and defence giant
(Reuters) – United Technologies Corp agreed on Sunday to combine its aerospace business with U.S. contractor Raytheon Co and create a new company worth about $121 billion, in what would be the sector’s biggest ever merger.
The deal would reshape the competitive landscape by forming a conglomerate which spans commercial aviation and defense procurement. United Technologies provides primarily commercial plane makers with electronics, communications and other equipment, whereas Raytheon mainly supplies the U.S. government with military aircraft and missile equipment.
While United Technologies and Raytheon have some common customers, their business overlap is limited, an argument the companies plan to make once U.S. antitrust regulators start scrutinizing the merger.
However, the two major commercial aircraft makers, Boeing Co and Airbus SE, as well as the Pentagon, have been known to use their significant purchasing power to seek concessions from their suppliers and may not welcome a potential lessening in competition among them.
When United Technologies rebuffed an acquisition offer from Honeywell International Inc in 2016, United Technologies chief executive Greg Hayes justified the decision partly by predicting that Boeing and Airbus would never accept having a supplier that would “build the plane from tip to tail.”
United Technologies has said it is on track to separate its Carrier air conditioning and Otis elevator businesses, leaving the company focused on its aerospace business through its $23 billion acquisition of Rockwell Collins, which was completed in 2018, and the Pratt & Whitney engines business.
Chinese authorities scrutinized the acquisition of airplane parts maker Rockwell Collins closely, given the companies’ footprint in that country’s market. This resulted in the deal closing in November 2018, as opposed to the targeted third quarter.
Trade tensions between the United States and China were blamed at least partly by analysts for that delay, but a source close to the deal said the companies did not expect this to be repeated because Raytheon does not do business in China.
Under the deal announced on Sunday, Raytheon shareholders will receive 2.3348 shares in the combined company for each Raytheon share. The merger is expected to result in more than $1 billion in cost synergies by the end of the fourth year, the companies said.
United Technologies shareholders will own about 57% of the combined business, called Raytheon Technologies Corporation, which will be led by Hayes. Raytheon shareholders will own the remaining stake, and Raytheon CEO Tom Kennedy will be named executive chairman. The companies negotiated the terms over several months, according to the source, who requested anonymity discussing the confidential deliberations.
The deal has been structured so that no shareholder of either company will receive a premium. United Technologies and Raytheon have market capitalizations of $114 billion and $52 billion, respectively.
The deal is expected to close in the first half of 2020.
The newly created company is expected to return between $18 billion and $20 billion of capital to shareholders in the first three years after the deal’s completion, the companies said. The new company will also assume about $26 billion in net debt, they added.
DEFENSE SPENDING RISE
Raytheon, maker of the Tomahawk and the Patriot missile systems, and other U.S. military contractors are expected to benefit from strong global demand for fighter jets and munitions as well as higher U.S. defense spending in fiscal 2020, much of it driven by U.S. President Donald Trump’s administration.
However, Pentagon spending is projected to slow down after an initial boost under Trump. A deal with United Technologies would allow Raytheon to expand into commercial aviation.
Conversely, United Technologies could benefit from reducing its exposure to commercial aerospace clients amid concerns that the rise of international trade protectionism will suppress economic growth and weigh on the flow of goods through air traffic.
The International Air Transport Association, which represents about 290 carriers accounting for more than 80% of global air traffic, cited these concerns earlier this month, when it said the industry is expected to post a $28 billion profit in 2019, down from a December forecast of $35.5 billion.
The deal with Raytheon could put pressure on General Electric Co, which competes with United Technologies for commercial aerospace clients, to seek scale. It could also push other defense contractors, such as Lockheed Martin Corp, to explore expanding their commercial businesses.
Last year, military communication equipment providers Harris Corp and L3 Technologies Inc announced an all-stock merger that, once completed, will create the sixth-largest U.S. defence contractor.
Morgan Stanley, Evercore Inc and Goldman Sachs Group Inc were financial advisers to United Technologies, while Wachtell, Lipton, Rosen & Katz was its legal adviser. Citigroup Inc was financial adviser to Raytheon, and RBC Capital Markets LLC provided a fairness opinion. Shearman & Sterling LLP was legal adviser to Raytheon.
(Reporting by Harry Brumpton and Kate Duguid in New York; Additional reporting by Mike Stone in Washington and Rama Venkat in Bengaluru; Editing by Richard Chang and Rosalba O’Brien)
PEORIA, Ill., May 17, 2019 /PRNewswire/ — Pioneer Railcorp (OTC: PRRR, “Pioneer”), a railroad holding company that owns short-line railroads and several other railroad-related businesses including a railroad equipment company and a contract switching services company, and BRX Transportation Holdings, LLC (“BRX”), an entity formed by Brookhaven Rail Partners (“Brookhaven”) and Related Infrastructure (“Related”), announced entry into a definitive merger agreement under which BRX will acquire Pioneer for $18.81 per share in cash. The agreement, which has been unanimously approved by Pioneer’s independent directors, represents a premium of approximately 100.7% over Pioneer’s closing stock price on May 16, 2019, the last trading day prior to the announcement of the transaction.
“We look forward to this next chapter in Pioneer’s journey and anticipate it will have a bright future under new ownership,” said Mike Carr, President and Chief Executive Officer of Pioneer.
“We are excited to partner with Related Infrastructure and to have worked with Pioneer’s management and board on a transaction that brings great value to its shareholders, its customers, and the communities it serves. Pioneer fits perfectly with Brookhaven’s philosophy of identifying opportunities where our hands-on management expertise, proprietary value creation strategies, and deep industry relationships provide us with a competitive advantage and the ability to create value,” said Alex Yeros, Principal of Brookhaven.
Related Infrastructure, a subsidiary of Related Fund Management which has raised over $5 billion of capital across a variety of different investment vehicles and strategies, invests in companies that develop, operate and service transportation infrastructure throughout the United States. Andrew Right, Managing Partner of Related Infrastructure said, “We are pleased to partner with Brookhaven to build a rail-based infrastructure platform. We appreciate the work Mike Carr and his team have done to create the Pioneer portfolio of rail businesses. We look forward to working with Alex and the entire team at Brookhaven, an industry leading team with over 25 years of experience building businesses in the short-line rail industry to further drive expansion of the platform.”
Under the terms of the merger agreement, BRX will acquire through merger all of the outstanding shares of Pioneer’s Class A common stock. Shareholders other than Pioneer’s subsidiary, Heartland Rail Investments LLC, will receive $18.81 per share in cash and the Heartland shares will be canceled without consideration.
In connection with the execution of the merger agreement, certain stockholders of Pioneer, together holding a significant portion of the outstanding shares of common stock of Pioneer, have agreed to vote their shares in favor of the transaction under a voting and support agreement.
The consummation of the merger is subject to various closing conditions, including approval by Pioneer’s shareholders, Surface Transportation Board approval, and operating performance by Pioneer within a specified working capital floor and debt ceiling. The merger is not subject to a financing condition. Subject to satisfaction of the closing conditions, the transaction is expected to close in the third quarter of 2019.
Arnold & Porter is acting as legal advisor to BRX in this transaction. BMO Capital Markets is serving as exclusive financial advisor to Pioneer in connection with this transaction and Briggs and Morgan, P.A. is acting as Pioneer’s legal advisor.
About Pioneer Pioneer Railcorp is the parent company of 17 short-line common carrier railroad operations, an equipment leasing company, two service companies and a contract services switching company. Pioneer and its subsidiaries operate in the following states: Alabama, Arkansas, Georgia, Illinois, Indiana, Iowa, Kansas, Michigan, Mississippi, Ohio, Pennsylvania and Tennessee. For more information on Pioneer, please visit: http://www.Pioneer-Railcorp.com
About Brookhaven Brookhaven Rail Partners is an affiliate of Denver-based Brookhaven Capital Partners, a privately held, real estate and infrastructure investment and management firm. Brookhaven and its principals have a 25-year track record of investing in, operating and developing critical transportation assets that support industry, and promote new economic development, community investment, and job creation. For more information on Brookhaven, please visit: http://www.BrookhavenPartners.com
(Reuters) – Canada’s WestJet Airlines Ltd said on Monday it will be acquired by private equity firm Onex Corp in an all-cash deal for C$3.53 billion ($2.63 billion).
Including debt, the deal is valued at about C$5 billion.
As part of the deal, WestJet shareholders will receive C$31 for each share held, representing an about 67% premium to its closing price on Friday.
The investment will be led by Onex Partners, Onex’s private equity platform focused on larger investment opportunities and WestJet’s board has recommended that its shareholders vote in favor of the deal.
The private equity fund has a history of investing in aerospace, having previously held a major stake in Boeing supplier Spirit Aerosystems.
The deal is expected to close in the latter part of this year or early next year, the company said.
CIBC Capital Markets and B of A Merrill Lynch were the financial advisers to WestJet, while Barclays, Morgan Stanley and RBC Capital Markets advised Onex.
(Reporting by Debroop Roy in Bengaluru; Editing by Arun Koyyur)
