Superior Aviation Beijing Co Ltd, a Beijing-based aerospace manufacturer, has executed an exclusivity agreement to acquire Hawker Beechcraft Inc for $1.79 billion, the US manufacturer of business aircraft announced on Monday.

The Chinese helicopter engine manufacturer, which is 60 percent owned by a closely held private entity, intends to expand its product lines in the general aviation industry through the transaction, Qian Chunyuan, assistant to chairman of Superior, said on Tuesday.

The company is 40 percent owned by a firm controlled by the Beijing municipal government.

Qian said the company is confident about the transaction, although the agreement would still be subject to a further competitive public auction process if the parties successfully negotiate an agreement, according to the US Bankruptcy Court's regulation.

"Other companies are also interested in Hawker Beechcraft, and it is possible that they would attend the public auction, but we have our advantages to meet their challenges," he said.

At least five other companies, including Embraer SA, Textron Inc and New United Group, might offer a higher price for Hawker Beechcraft, since Superior's price is already released, business insiders said.

But Qian said Superior does not depend only on the price to persuade Hawker Beechcraft to accept its offer, as its experience shows that Superior could help Hawker Beechcraft through the hard times.

The Chinese company acquired Superior Air Parts Inc in 2010, after the Texas-based helicopter engine maker filed for bankruptcy protection.

"Superior Air Parts is working very well and has started to make a profit again," Qian said. "That shows we know how to help the company."

On the other side, the huge potential of China's general aircraft market has caught the eye of Hawker Beechcraft.

"This combination would give Hawker Beechcraft greater access to the Chinese business and general aviation marketplace, which is forecast to grow more than 10 percent a year for the next 10 to 15 years," said Robert Miller, CEO of Hawker Beechcraft.

If the transaction is completed, Superior intends to maintain Hawker Beechcraft's existing operations while investing substantial capital in the company and its business and general aviation product line, saving thousands of US jobs, the US company said in a statement.

"The bid for the company was the most attractive we received during the strategic review process, and the going-forward plan offered the most continuity for our business, allowing us to preserve jobs, product lines and our ability to maintain our commitments to our customers," said Bill Boisture, chairman of Hawker Beechcraft.

The central government is encouraging domestic enterprises to go overseas, especially to purchase advanced technology, and Superior is working to obtain all regulatory approvals from the central government for this investment project, the company said.

The transaction is also subject to approval by the US Committee on Foreign Investment in the United States, and would be subject to customary US regulatory reviews and approvals.

There would be a 45-day exclusivity period while the two companies negotiate definitive documentation of the transaction.

According to the terms of the agreement, Superior will make the payment over the next six weeks.

But the transaction would not include Hawker Beechcraft Defense Company, which would remain a separate entity.

In the event that Hawker Beechcraft Defense Company is sold, up to $400 million of the $1.79 billion purchase price will be refundable to Superior.

If negotiations with Superior break down, Hawker Beechcraft will proceed with its bankruptcy reorganization plan and emerge as a standalone entity.

Hawker Beechcraft, owned by GS Capital Partners and Onex Partners, has struggled with declining demand for its military planes and business jets, and filed for bankruptcy protection in May.

Contact the writer at wangwen@chinadaily.com.cn