Composites specialist Hexcel (Stamford, Connecticut / USA; www.hexcel.com) and Woodward (Fort Collins, Colorado / USA; www.woodward.com), a manufacturer of controls and components, are planning to join forces. The merger will create a group with a turnover in excess of USD 5 bn (EUR 4.5 bn). About three quarters of this is to be generated with integrated systems for the aerospace and defence industries.

Approval by the shareholders of Woodward and Hexcel and the competent regulatory bodies is pending. Both parties expect the merger to be completed in the third quarter of 2020. The companies are aiming for annual synergy effects of around USD 150m two years after the transaction.

The USD 6.4 bn deal is expected to create a leading technology supplier of composite components with integrated control systems. By revenues, the new Woodward Hexcel headquartered in Fort Collins will be the world’s sixth largest independent supplier to the aerospace and defence industry, with more than 16,000 employees and production facilities in 14 countries. The aim is to accelerate research and development activities in order to better meet the needs of the target industries for solutions to improve aerodynamics, energy efficiency and safety as well as low-emission technologies. A yearly amount of USD 250m is to be jointly spent on R&D in future.

Hexcel’s portfolio includes composite technologies and products for aircraft construction and other applications, such as wind turbines. About 4,000 employees worldwide produce carbon fibres, prepregs, dry fabrics, honeycomb cores, semi-finished products and finished components. Woodward develops and produces actuators, sensors and controls primarily for the aerospace sector as well as for the oil and gas industries.

Both companies have so far been suppliers to Boeing and are therefore affected by the production stoppage of the “737 Max”. It is still unclear when the model will be able to reclaim the approval that was withdrawn following two plane crashes. In its annual report, at least, Woodward’s experts are expecting a new approval to be granted in the second quarter of 2020.

Boeing competitor Airbus, according to its own account, delivered a total of 863 commercial aircraft in 2019. It then surpasses Boeing as the world’s largest aircraft manufacturer, with the US company supplying 345 aircraft by the end of November 2019. According to media reports, more than 400 completed 737 Max aircraft are in stock and remain undelivered. Since the growth at Airbus cannot compensate for this slump, the future of this model will have a major impact on the future of Woodward Hexcel.