Textron gains key FTC approval for acquisition of Beechcraft
04/23/2014 9:21 AM
08/08/2014 10:22 AM
Textron’s deal to acquire Wichita’s Beechcraft Corp. is now expected to close this month, earlier than expected when the acquisition was announced in late December.
That’s according to a Textron filing with the Securities and Exchange Commission on Tuesday.
In December, Textron, parent company of Cessna Aircraft, signed a deal with Beechcraft to acquire the Wichita planemaker for $1.4 billion. The companies then said the deal was expected to close in the first half of 2014.
On Tuesday, the U.S. Federal Trade Commission on Tuesday granted Textron and Beechcraft “an early termination of the waiting period” under the Hart-Scott-Rodino Antitrust Improvements Act, paving the way for the deal to close.
Under the Act, parties can’t complete certain mergers and acquisitions until they’ve made a detailed filing with the U.S. Federal Trade Commission and the Department of Justice and waited for them to determine that the transaction won’t adversely affect U.S. commerce under antitrust regulations.
The deal can’t close until the waiting period outlined in the Act has passed or the government has granted early termination of the waiting period.
In the filing, Textron said that the merger is expected to close this month, subject to other regulatory approvals and closing conditions.
“It’s good news that things are moving along quickly,” Textron spokesman David Sylvestre said, adding that it was a little more quickly than expected.
The FTC gave Textron the clearance to close this month.
“Everything is looking good,” Sylvestre said.
Still, there’s more work to be done.
“I wouldn’t say for sure it was going to close in the month of March,” Sylvestre said. “But we are cleared to do that.”
Textron is in the final stages of due diligence, including the normal legal and financial reviews, before the deal can close, he said.
“We want it to be closed as soon as we’re able to do that and as soon as all the legalities are tied up,” Sylvestre said.
In the meantime, a transition team made up of representatives from Textron, Cessna and Beechcraft continues to meet regularly.
“They’re putting together a really solid plan of how the two companies are going to work together in these functions,” Sylvestre said. “It’s proceeding right on plan.”
Textron CEO Scott Donnelly said in an interview after the deal was announced that the purchase of Beechcraft is an excellent fit for the company that owns Cessna Aircraft, but it will require “restructuring and optimization of costs.”
“Clearly, we need to take actions necessary to make Cessna and Beechcraft profitable and healthy businesses,” Donnelly said at the time.
That includes continuing to invest in the companies’ product lines and service businesses as well as restructuring, Donnelly said. The restructuring will likely include some job cuts, he said.