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Bid floated for US plane maker

By Wang Wen  (China Daily)

13:29, July 11, 2012

Superior Aviation Beijing Co Ltd, a Beijing-based aerospace manufacturer, has executed an exclusivity agreement to acquire Hawker Beechcraft Inc for $1.79 billion, the US manufacturer of business aircraft announced on Monday.

The Chinese helicopter engine manufacturer, which is 60 percent owned by a closely held private entity, intends to expand its product lines in the general aviation industry through the transaction, Qian Chunyuan, assistant to chairman of Superior, said on Tuesday.

The company is 40 percent owned by a firm controlled by the Beijing municipal government.

Qian said the company is confident about the transaction, although the agreement would still be subject to a further competitive public auction process if the parties successfully negotiate an agreement, according to the US Bankruptcy Court's regulation.

"Other companies are also interested in Hawker Beechcraft, and it is possible that they would attend the public auction, but we have our advantages to meet their challenges," he said.

At least five other companies, including Embraer SA, Textron Inc and New United Group, might offer a higher price for Hawker Beechcraft, since Superior's price is already released, business insiders said.

But Qian said Superior does not depend only on the price to persuade Hawker Beechcraft to accept its offer, as its experience shows that Superior could help Hawker Beechcraft through the hard times.

The Chinese company acquired Superior Air Parts Inc in 2010, after the Texas-based helicopter engine maker filed for bankruptcy protection.

"Superior Air Parts is working very well and has started to make a profit again," Qian said. "That shows we know how to help the company."

On the other side, the huge potential of China's general aircraft market has caught the eye of Hawker Beechcraft.

"This combination would give Hawker Beechcraft greater access to the Chinese business and general aviation marketplace, which is forecast to grow more than 10 percent a year for the next 10 to 15 years," said Robert Miller, CEO of Hawker Beechcraft.

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