Mitsubishi Heavy Industries closed on its acquisition of Bombardier’s CRJ program as scheduled on Monday, marking the launch of MHI RJ Aviation Group. Under the terms of the deal, MHI acquires the maintenance, engineering, airworthiness certification support, refurbishment, asset management, marketing, and sales activities for the CRJ Series aircraft, along with the type certificates and related intellectual property rights. The transaction also includes the related services and support network mainly located in Mirabel and Toronto, Canada, and in the U.S., in Bridgeport, West Virginia; and Tucson, Arizona. MHI RJ will continue to distribute CRJ series spare parts from warehouses in Chicago and Frankfurt, Germany. Bombardier will continue to supply components and spare parts and will assemble the remaining 15 CRJ aircraft in the backlog on behalf of MHI until all get delivered sometime in the second half of 2020.

Terms of the deal include cash consideration of roughly $550 million, subject to post-closing adjustments and the assumption of liabilities by MHI related to credit and residual value guarantees and lease subsidies amounting to approximately $200 million. Under the agreement, Bombardier’s net beneficial interest in the Regional Aircraft Securitization Program (RASPRO), which carries a value of some $170 million, has transferred to MHI.

The acquisition enlarges MHI’s regional aircraft portfolio at a time when it otherwise has shrunk its rate of investment in Mitsubishi Regional Aircraft (MITAC) and shuttered most of the division’s operation in the U.S.

Last month, MHI said it would more than halve funding for the SpaceJet regional jet as it reported impairment losses from its planned acquisition of the CRJ program and development costs for the 2019 fiscal year totaling 263.3 billion yen ($2.46 billion), compared with total expenditures of 85.1 billion yen in 2018. This year, it plans to pare SpaceJet development spending from 140.9 billion yen to 60 billion yen as it addresses Covid-19-related pressures throughout the wider enterprise.

As part of its retrenchment, MHI suspended development of the 76-seat M100, a program the Japanese company had envisioned as a prime beneficiary of the CRJ acquisition. Meanwhile, MHI has delayed the development of the 88-seat M90 for at least another year, meaning the larger model won’t gain certification until mid-2021 at the earliest.