By Doug Cameron
Aerospace suppliers Woodward Inc. and Hexcel Corp. set plans for an all-stock merger in what executives said was a response to the rising tide of climate-change pressures facing the industry.
The U.S. companies make parts for Airbus SE /zigman2/quotes/208224336/delayed FR:AIR -3.54% and Boeing Co. /zigman2/quotes/208579720/composite BA -3.81% jets, including the grounded 737 MAX, which Boeing halted production of this month. Woodward /zigman2/quotes/201720095/composite WWD -2.49% and Hexcel /zigman2/quotes/209574944/composite HXL -4.99% said their merger would allow them to expand spending on research and development of more efficient engines and lightweight aircraft parts.
The combined company — which would be known as Woodward Hexcel — would rank among the aerospace industry’s largest suppliers, with combined sales of $5.3 billion last year and 16,000 staff. The companies’ combined market capitalization is $13.7 billion.
Airlines and aircraft makers are under increasing pressure to address the industry’s emissions and noise footprint. The airline industry accounts for around 2% of global greenhouse-gas emissions, but rapid traffic growth has made it a target for environmental concerns. Executives at Woodward and Hexcel said those forces drove their plans to merge.
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