Hawker Beechcraft Deal Triggers Skepticism

Several analysts question large sum.

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In the wake of Hawker Beechcraft's announcement that it plans to sell the company to Beijing-based Superior Aviation for $1.79 billion, certain aspects of the deal are raising eyebrows among skeptical industry watchers.

A number of analysts quoted in multiple news reports have questioned the large sum being offered for the company, maintaining such an amount for the beleaguered entity – which filed for bankruptcy in May to wipe out a massive $2.5 billion in debt – is excessive, especially considering that Hawker Beechcraft Defense Company is not part of the agreement.

Analysts also questioned claims that the deal would offer the company a reasonable path forward in terms of growth because of increased access to the Chinese market. When announcing the move, Hawker Beechcraft CEO Robert Steve Miller said the decision to sell out to Superior “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 10-15 years.”

Due to Superior’s small size in comparison to other, larger Chinese aviation firms, some analysts also question the firm’s ability to take advantage of that growth potential with Hawker Beechcraft’s older product lines.

While some are skeptical of the deal, others say the announcement may actually bring higher bids in for the storied American manufacturer – although the same thing was said before Chinese interests went ahead and bought Cirrus.

Some also maintain the deal with Superior does serve as a threat to Cessna, which recently signaled its move into the Chinese market in a partnership with AVIC.