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The new company will be known as Woodward Hexcel. It will focus on technology-rich innovations to deliver smarter, cleaner, and safer customer solutions.
Boeing and Airbus SE jets suppliers Woodward and Hexcel are merging to create a new provider for the aerospace industry. Within the deal, Woodward and Hexcel will increase their spendings on research and new developments in the sphere of aerospace.
As a result of the merge, Woodward shareholders will own about 55% of the new company. As for Hexcel shareholders, they will own some 45%.
Woodward CEO Tom Gendron, who will become an executive chairman of the new enterprise, commented:
“Our two companies are each independently working toward addressing the sustainability and efficiency needs of our customers. This merger accelerates our technology investments and creates greater benefits and growth opportunities than either company could have achieved alone. Both Woodward and Hexcel have attractive growth trajectories, with strong aftermarket positions and increased composite penetration driving our respective outlooks.”
Hexcel as a New Aerospace Giant
According to the announcement, Woodward and Hexcel are merging to “focus on technology-rich innovations to deliver smarter, cleaner, and safer customer solutions”
The new company will be conquering the markets under the name Woodward Hexcel. Its board will consist of five directors from each company. Besides, it will employ more than 16,000 people. Moreover, the company will conduct manufacturing operations in 14 countries on five continents. Its headquarters will be in Fort Collins, Colorado.
Over 2019, Woodward has increased by 60%, while Hexcel has risen 21%. The biggest customer of both companies is Boeing. It accounts for 25% of Hexcel’s annual sales. Besides, it makes up about 15% of Woodward’s annual sales.
As Woodward and Hexcel have estimated, their merge will generate net revenues of approximately $5.3 billion.
Nick Stanage, Hexcel CEO who will lead Woodward Hexcel, stated:
“The future of flight and energy efficiency will be defined by next-generation platforms delivering lower cost of ownership, reduced emissions, and enhanced safety – and a combined Hexcel and Woodward will be at the forefront of this evolution. Woodward’s innovative control systems and Hexcel’s advanced lightweight materials are designed to drive improved reliability, efficiency, and emissions.”
“Through our combined scale and strong cash flow profile, we will be even better positioned to accelerate innovation in aerodynamics and propulsion efficiencies and support evolving customer needs. I am incredibly excited about what we can accomplish by uniting these two premier companies and world-class teams with similar values, cultures, and operating philosophies,” continued he.
Moreover, according to Bloomberg, Hexcel and Woodward’s merge is one of the largest deals ever. Above all, Goldman Sachs & Co. and JPMorgan Securities LLC served as the deal advisors.