(Adds Boeing, Delta comments, UK reaction)
By Allison Lampert and Tim Hepher
MONTREAL/PARIS, Oct 16 (Reuters) - Airbus SE agreed on Monday to buy a majority stake in Bombardier Inc’s CSeries jetliner program, grabbing control of a struggling competitor at the second attempt and giving the Canadian plane-and-train-maker an unexpected boost in its costly trade dispute with Boeing Co.
The deal, which would come at no cost for Airbus, would give the European planemaker a 50.01 percent interest in CSeries Aircraft Limited Partnership (CSALP), which manufactures and sells the jets, the companies said.
Airbus Chief Executive Tom Enders said the company has offered to assemble some of the narrowbody jets at its U.S. plant in Alabama for orders by American carriers.
The U.S. assembly line would mean the 110-to-130-seat jets would not be subject to possible U.S. anti-subsidy and anti-dumping duties of 300 percent, Bombardier Chief Executive Alain Bellemare said on a media conference call.
“This is a strategic decision. We’re doing this deal here not because of this Boeing petition. We are doing this deal because it is the right strategic move for Bombardier. And it makes good strategic sense for Airbus,” Bellemare said.
A Boeing spokesman immediately dismissed the agreement as a “questionable deal between two state-subsidized competitors” to try to skirt a recent U.S. trade finding against the CSeries.
The Boeing-Bombardier dispute has snowballed into a bigger multilateral trade dispute, with British Prime Minister Theresa May wading into the debate and asking U.S. President Donald Trump to intervene in order save British jobs.
Bombardier is the largest manufacturing employer in Northern Ireland, which is the poorest of the United Kingdom’s four nations and remains mired in political sensitivities after emerging from decades of armed sectarian conflict.
On Monday, the leader of the Northern Irish party propping up Britain’s minority government said Airbus’s deal with Bombardier was “incredibly significant news” for Belfast.
Talks for the deal between Airbus and Bombardier first started in August. Enders said the deal was different from an earlier round of talks in 2015, when he abruptly ordered an end to negotiations. He said the CSeries’ performance had now been certified and entered service and was performing well.
“It’s an entirely different situation,” he said.
Delta Air Lines Inc said after the announcement of the deal that it looked forward to introducing the CSeries jet into its fleet.
Under the deal, Bombardier will own about 31 percent, while Investissement Québec, the investment arm of the province of Quebec, will hold 19 percent once the deal closes.
Quebec’s largest pension fund, which holds a 30 percent stake in Bombardier’s rail division, said the decision “strengthens the company, improves its prospects for growth, and makes the company more robust over the long term.”
The Quebec government, through its financing arm, took a 49 percent stake in the CSeries program in 2015 for $1 billion. Quebec’s share, most recently worth 38 percent, slipped to 19 percent following the deal with Airbus.
The deal also provides Airbus warrants exercisable to acquire up to 100 million Class B Shares of Bombardier.
Airbus will provide procurement, sales and marketing, and customer support expertise to CSALP, the companies said.
There will be no cash contribution by any of the partners, nor will CSALP assume any financial debt, they said.
Bombardier expects a $400 million loss in commercial aircraft this year, but has set a breakeven target for 2020. (Additional reporting by Ankur Banerjee in Bengaluru and Alana Wise in Atlanta; Writing by Denny Thomas; Editing by Sriraj Kalluvila and Mary Milliken)