In March, industry consultant and investment banker Brian Foley published a report exploring the buying up of US general-aviation companies by foreign entities. In doing so, he discovered a widespread penchant for getting one particular company, Cirrus Aircraft, back under US control. A Chinese company, China Aviation Industry General Aircraft Co., is in the process of buying the Duluth, Minn.-based company.
Cirrus is viewed by many to be part of America’s aviation heritage, but its sale to China is pending in a deal that might be approved as early as this month, Foley notes.
Although formed in 1984, Cirrus has been 58% owned by the Bahraini concern Arcapita since 2001. The current Chinese deal, for a reported $210 million, would be for 100% of the company — leaving no US ownership, which has been a major cause of consternation, he says. That’s why he tried to assemble a group of investors and organize an 11th-hour unsolicited bid.
“The initial investor response was swift and encouraging,” Foley said. “We’ve since had time to follow up, and even contact those on our own aerospace investor list. While we continue to identify and vet more prospective investors, the general consensus thus far is to see first whether the Chinese offer currently on the table proceeds to fruition. There is some element of doubt on this, but many believe it probably will. If it doesn’t, however, we have investors waiting to reevaluate the situation. We acknowledge our investors’ viewpoint in following this approach.”
Foley believes that other possible investor groups are also working on contingency plans for Cirrus. “Some have been in contact with us, while others are more low-key. What’s important is knowing that the merits of our concept are shared by others, which hopefully boosts the odds of restoring Cirrus as an American-owned fixture.”
The China-Cirrus deal must be approved by both the U.S. and China government before it can proceed.