Cranfield Aerospace Solutions Ltd (CAeS), a British developer of hydrogen-electric fuel cell propulsion technology, and local aircraft manufacturer Britten-Norman intend to merge in a deal backed by London-listed clean hydrogen investment fund HydrogenOne Capital Growth PLC (LON:HGEN).
CAeS and Britten-Norman have inked a heads of terms agreement for a potential combination to create the world's first fully integrated, zero-emissions sub-regional aircraft with plans to put it into service in 2026, HydrogenOne announced in a filing last week.
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The transaction is set to close in mid-2023, subject to due diligence.
The tie-up is aimed at combining CAeS's pioneering development of a hydrogen-electric fuel cell propulsion system with the existing Britten-Norman aircraft technology. The two companies have been already collaborating on Project Fresson for over two years.
The new entity is already working on a new financing round to support its growth.
A consortium of CAeS investors including HydrogenOne, the corporate venture arm of French aerospace company Safran Group and the UAE-based venture capital firm Strategic Development Fund intends to invest up to GBP 10 million as part of the fund-raiser. HydrogenOne, as a lead investor, will be providing up to GBP 5 million. Britten-Norman's existing owners, including lead backer Alawi Zawawi, will also join the new business.
The merger plan comes about a month after HydrogenOne and Safran Corporate Ventures made a common investment of more than GBP 10 million (USD 12.4m/EUR 11.2m) in the UK aircraft innovation company.
(GBP 1 = USD 1.243/EUR 1.128)