Cirrus chairman and co-founder Dale Klapmeier this week sought to put an end to talk of a possible counter bid to a buyout deal from a Chinese aviation company. “There is no counter offer,” Klapmeier said at Sun ‘n Fun on Wednesday when asked about the news that a group of private U.S. investors led by market analyst Brian Foley was banding together to outbid China Aviation Industry General Aircraft (CAIGA) Co. for the assets of Cirrus.
Foley told Flying he has received commitments from investors for about half the money he needs to bid on Cirrus, which has a rumored selling price north of $200 million. Klapmeier’s response was incredulous. “We’ve talked with everyone in this industry who might be interested in buying Cirrus,” he said. “The chance that somebody who has never talked with the company could come in and bid for Cirrus at this stage is beyond remote.”
The largest remaining hurdle before the Chinese deal can close is U.S. government approval. Rep. Chip Cravaack, a freshman congressman in Cirrus’s home district in Duluth, Minnesota, has urged the Justice Department to take its time with its review. While Klapmeier admitted he is no expert on such matters, he said he sees no reason why the deal shouldn’t close on time this summer.
“If the Chinese military wants to use our composite technology for their fighter jets, I can tell you [the U.S. military] will love that,” Klapmeier joked.
Asked whether Cirrus production would move to China, Klapmeier insisted its airplanes will continue to be built in Duluth, with production in China starting only when an indigenous Chinese market emerges. “It makes no economic sense for us to ship parts to China, build airplanes there and then ship them back to customers in the U.S.,” he said.
He noted that CAIGA is already a $2.9 billion aviation company that wants to turn Cirrus into a profitable business, first by bringing the single-engine Vision jet to the market and later by introducing a full family of two- to eight-seat airplanes.