TCM Acquired By Chinese Aerospace Group, Deal Expected To Close
by 1Q/11
ANN RealTime Update, 12.14.10,
0435 ET: Chinese aerospace interests have just scored
a major acquisition with the news that AVIC will be purchasing
TCM. Just moments ago, Teledyne Technologies Incorporated and
AVIC International Holding Corporation ("AVIC International")
announced an agreement to sell Teledyne's general aviation piston
engine business to Technify Motor (USA) LTD., a subsidiary of AVIC
International, for $186 million in cash. Under the transaction,
AVIC International will acquire Teledyne Continental Motors, Inc.
and Teledyne Mattituck Services, Inc.
According to the release: Headquartered in
Mobile, Ala., Continental Motors is a leading manufacturer of
FAA-certified piston engines, as well as spare parts and
components, used in small propeller-driven general aviation
aircraft around the world. Continental Motors employs approximately
400 workers in Mobile, and has been a highly reliable manufacturer
of commercial aircraft piston engines for more than 80 years.
Continental Motors also maintains service centers in Fairhope, Ala.
and Mattituck, N.Y.
With major customers such as Boeing, Airbus, Honeywell and
Snecma, AVIC International is a trusted supplier and partner of
leading aviation companies in the U.S. and around the world. The
transaction will enhance the ability of Continental Motors to
compete globally, especially in growing overseas markets, such as
China. Today, Continental Motors' primary markets are the U.S. and
Europe. On the other hand, China opens one of the world's largest
potential markets for general aviation aircraft, due to its growing
population, large geographical area and expanding infrastructure.
Compared to 230,000 general aviation aircraft in the U.S., China
has approximately 900 small aircraft operating in the country. That
number is expected to grow over the next decade, raising demand for
FAA-certified piston engines.
AVIC International was attracted to Continental Motors' long
history in the general aviation market and the company's reputation
for product quality, safety and service. With the acquisition of
Continental Motors, AVIC International is making a principal
commitment to the Mobile region. AVIC International expects to
retain the senior management of Continental Motors and maintain
Continental Motors' global headquarters in Mobile, Ala.
Furthermore, the transaction sets the stage for new hires of
skilled workers in Mobile, as international demand for
piston-powered aircraft would result in increased engine
manufacturing at Continental Motors. AVIC International also plans
continued investment and upgrades in Continental Motors'
operations, as well as increased research and new product
development.
"I am excited about the opportunity to work with the AVIC
International team," said Rhett Ross, President of Continental
Motors. "AVIC International will greatly strengthen Continental
Motors' market access. In addition, increased investment will
accelerate new products, such as Continental Motors' TD-300 diesel
engine, which is well-suited to growing regions given international
fuel availability. The transaction will allow Continental Motors to
continue to be a global leader in the general aviation piston
engine industry."
"The sale of Continental Motors to AVIC International is the
right long-term solution for Continental Motors, its workforce and
the Gulf Coast Community," said Robert Mehrabian, Chairman,
President and Chief Executive Officer of Teledyne. "This sale
allows Teledyne to focus on its core businesses, while ensuring a
bright future for Continental Motors to build on its long,
successful history as a manufacturer of proven piston engines for
general aviation aircraft. This will significantly enhance
Continental Motors' opportunity to enter the global market for the
sale and service of general aviation piston engines."
TCM Diesel Prototype
"AVIC International is eager to begin its collaboration with
Continental Motors, continuing its reputation as a highly respected
maker of FAA-certified piston engines," said Wu Guangquan,
President & CEO, AVIC International. "We are impressed with
Continental Motors' products, employees and facilities.
Furthermore, we were attracted to Mobile's international
environment focus and the continually growing concentration of
aviation-related international companies in the Mobile area. We
look forward to working with current leadership at Continental
Motors to expand the Continental Motors' facility to supply
expected growth in the general aviation market worldwide, in
particular, to ensure safe and reliable aircraft operations for all
customers."
The transaction is expected to close in the first quarter of
2011. The acquisition of Continental Motors by AVIC International
is subject to customary closing conditions, including clearance
under the Hart-Scott-Rodino Antitrust Improvements Act and by the
U.S. Government's Committee on Foreign Investment in the United
States (CFIUS), as well as obtaining all relevant Chinese
Government Approvals.
ANN's Daily Aero-Linx (04.15.24)
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