Virus Didn't Have to Ground This Aviation Deal
Suppliers Hexcel and Woodward called it quits on their merger. That feels short-sighted.
If you liked this tie-up of two Boeing suppliers in January, you should like it even more now.
Photographer: David Ryder/BloombergWho’s willing to bet on the aerospace industry’s quick return from the coronavirus devastation? Not the CEOs of two of its leading suppliers.
Woodward Inc. and Hexcel Corp. mutually agreed to call off their planned merger in light of the current pandemic. More than half of the world’s fleet has been grounded as travel bans and fear of contagion keep fliers at home, forcing the aerospace industry into a fight for its survival. This isn’t the first deal to get scotched because of the coronavirus: Xerox Holdings Corp. called off its $35 billion hostile pursuit of HP Inc. and private equity firm Apollo Global Management Inc. reportedly abandoned talks with TV-station owner Tegna Inc. for an $8.5 billion takeover. But both of those transactions reportedly involved at least some cash, which has become a precious commodity in the age of the coronavirus. The Woodward-Hexcel merger, by contrast, was all-stock, and as such, not dependent on capricious debt markets and an ill-timed overloading of balance sheets.