Exclusive - Bombardier offered majority stake in CSeries jet to Airbus: sources

By Allison Lampert, Andrea Shalal and Tim Hepher

MONTREAL/WASHINGTON/PARIS (Reuters) - Bombardier (BBDb.TO) has approached European planemaker Airbus (AIR.PA) about selling a majority stake in the Canadian company's CSeries jet in order to shore up its depleted balance sheet, people familiar with the matter said.

Under a proposed tie-up, Airbus would help Bombardier complete development of the troubled aircraft in exchange for a controlling stake in the programme, effectively ending Bombardier’s independent efforts to break into the 100 to 160-seat airplane market dominated by Airbus and Boeing (BA.N).

Significant hurdles would need to be cleared before Airbus took up the surprise offer to invest in its smaller competitor.

"There are ongoing discussions, but they are still exploratory ones. Neither management has made a decision," said one of the sources, who asked not to be identified given the sensitivity of the matter, as did the other sources.

Another source called the contacts "serious," but cautioned that it "would be an extremely complicated structure to set up."

If a deal is reached, Airbus would fund the final phase of development of the CSeries, an all-new, medium-haul, carbon-composite jet due to enter service next year, according to two sources. The deal would involve a minimal amount of cash up front, they said.

In return, Airbus would receive a controlling stake in the aircraft - which is years late and billions over budget - and a share in its revenue, although details are still being worked out.

The firms would probably form a separate board for the CSeries and sign a strategic agreement to jointly market the plane, if a deal was reached, sources said.

Airbus and Bombardier declined comment. "We have no comment on rumours about other companies, but we are always monitoring developments in our industry," Rainer Ohler, head of communications at Airbus Group, said.

Bombardier spokeswoman Isabelle Rondeau said the company would not “comment on rumours.”

Until recently, Bombardier had been reluctant to offer a majority stake in its main aircraft development programme, but the company’s weakened balanced sheet has forced the Beaudoin family that controls the board to consider all options, said one source, who asked not to be named as they were not authorized to speak publicly.

(Additional reporting by Allison Martell and Euan Rocha in Toronto and Arno Schuetze in Frankfurt; Editing by Amran Abocar)