Why Hawker Beechcraft's China Sale Was Dead on Arrival

Why Hawker Beechcraft’s China Sale Was Dead on Arrival

Stephen Pope

Thursday, October 18, 2012 at 06:54 PM ET

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Key Takeaways:

The planned $1.79 billion sale of Hawker Beechcraft to Superior Aviation Beijing has officially collapsed.
Skepticism about the deal existed from the outset due to Superior Aviation Beijing's unknown background and questionable financial capacity to complete such a large acquisition.
The deal's unraveling was indicated by several red flags, including a lack of communication, evasive PR responses, and the abrupt cancellation of meetings.

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I’d planned on telling you today all the reasons why I felt Hawker Beechcraft’s planned sale to Superior Aviation Beijing was very likely on the verge of unraveling. I’ll still do that, but the story took on a new dimension when a press release from Hawker Beechcraft arrived in my e-mail inbox at 8:05 this morning proclaiming the deal was dead.

I’d argue that the deal was actually dead on arrival, way back in July, when Superior Aviation Beijing stepped forward with an offer to buy the struggling Wichita company for $1.79 billion. The reasons are pretty simple: Nobody had ever heard of Superior Aviation Beijing, and nobody seriously thought this company was actually going to write a check of that gargantuan size, even if it could. A closer look at Superior’s financials reveals that it probably could not.