Hexcel, Woodward terminate planned merger
Uncertainty in the aerospace and industrial markets caused by the coronavirus pandemic have forced the two companies to terminate their planned merger of equals.
Hexcel Corp. (Stamford, Conn., U.S.) and Woodward Inc. (Fort Collins, Colo., U.S.) on April 6 announced that the companies have mutually agreed to terminate their merger agreement, previously announced on Jan. 12, 2020, under which the parties had agreed to combine in an all-stock merger of equals.
The termination was approved by the Boards of Directors of both companies and is in response to the increasing impact on both the aerospace and industrial sectors, and global markets broadly, resulting from the health crisis caused by the coronavirus (COVID-19) pandemic. The pandemic has resulted in a need for each company to focus on its respective businesses and has impacted the companies’ ability to realize the benefits of the merger during these unprecedented times.
In a joint statement, Tom Gendron, chairman, CEO and president of Woodward, and Nick Stanage, chairman, CEO and president of Hexcel, said, “While we both believed from the outset, and continue to believe, in the benefits of a combined Woodward and Hexcel, we mutually concluded after careful consideration that given the significant uncertainty in the market, it would not be prudent to continue to pursue the combination and integration of our companies in a merger of equals. Although we are disappointed with this outcome, we are confident this is the right decision for our customers, our shareholders, and our employees as it allows each of us to dedicate our focus and resources toward ensuring Woodward and Hexcel each remain strong and closely connected with our customers and supply chains during these unparalleled times. We continue to be hopeful that our two companies will find opportunities to collaborate on next-generation platforms in the future for the benefit of our customers.”
Neither party will be required to pay the other a termination fee as a result of the mutual decision to terminate the agreement.
Woodward is an independent designer, manufacturer, and service provider of control system solutions and components for the aerospace and industrial markets.
Hexcel is an advanced composites company that develops, manufactures and markets lightweight, high-performance structural materials, including carbon fibers, specialty reinforcements, prepregs and other fiber-reinforced matrix materials, honeycomb, adhesives, engineered core and composite structures, used in commercial aerospace, space and defense and industrial applications.
For composite applications, these hollow microstructures displace a lot of volume at low weight and add an abundance of processing and product enhancements.
Lightweight, hard and stable at high temperatures, CMCs are emerging from two decades of study and development into commercial applications.
Compared to legacy materials like steel, aluminum, iron and titanium, composites are still coming of age, and only just now are being better understood by design and manufacturing engineers. However, composites’ physical properties — combined with unbeatable light weight — make them undeniably attractive.