McMillan advises FTAI Aviation in its USD$170 Million acquisition of Lockheed Martin Commercial Engine Solutions

On September 9, 2024, FTAI Aviation Ltd. (NASDAQ: FTAI) (“FTAI”) completed its previously announced agreement to purchase the Commercial Engine Solutions business of Lockheed Martin (NYSE:LMT) at the Montréal airport, for USD$170 million. The completion of the acquisition was subject to satisfactory customary regulatory approvals.

The acquisition further enhances FTAI’s Maintenance, Repair, and Exchange (MRE) business, and creates permanent engine and module manufacturing capabilities in Canada. FTAI will continue to expand its module customer base, which currently includes over 50 airlines and lessors globally. Additionally, FTAI expects to establish a center of excellence in Montréal for piece-part repairs, serving both its own operations, including the Used Serviceable Material business, and third-party customers.

LMCES is a 526,000-square-foot aircraft engine maintenance repair facility located in Montréal, Québec, with extensive engine and piece-part repair capabilities for CFM56 engines. FTAI, LMCES’s largest customer, and LMCES established The Module Factory™ at the facility in 2020 to distribute CFM56 modules globally. The facility has a capacity for up to 900 CFM56 modules per year and houses three test cells on-site.

McMillan acted as lead counsel to FTAI, expertly relying on our Competition, Antitrust & Foreign Investment, Transportation, and Aviation groups, in connection with this cross-border transaction. François Tougas lead the national and multi-disciplinary team, which included Enda Wong and David Zhang (Business Law and M&A); Julia Loney, Beth Riley, Tayler Farrell, William Wu, James Musgrove (Regulatory);Kyle Lambert, Mireille Germain and Miguel Therrien (Employment & Labour); Sonia Rainville and Nicholas Yanakis (Commercial Real Estate); Martin Thiboutot (Environment); Jamie Wilks, Steven Sitcoff and Michael Friedman (Tax); and Pablo Tseng (Intellectual Property).

The transaction highlights McMillan’s extensive experience in complex regulatory matters and deep understanding of the aviation industry. We regularly advise Canadian and international airlines, investors, operators of aviation facilities, and industry stakeholders in connection with corporate structuring, commercial transactions, regulatory clearances, licensing and compliance, financing and leasing, and foreign investment regulation, and competition/antitrust matters, including multi-jurisdictional class action defence.

As a national business law firm with exceptional capabilities to lead businesses through cross-border transactions and investments into Canada, McMillan provides real-time business solutions to clients operating in multifaceted regulatory regimes. Our legal teams are skilled at structuring and closing complex deals in Canada, the US and internationally and in providing innovative transactional advice. Our understanding of business imperatives and our relationships with the regulators helps our clients stay ahead.