Boeing has agreed to acquire key supplier Spirit AeroSystems—which makes the fuselages for many of Boeing’s planes—in a deal valued at $4.7 billion, the plane maker said early on Monday, after months of negotiations amid major turmoil at the company over safety and regulatory issues.
Spirit AeroSystems makes fuselages for Boeing’s troubled 737 Max jets.
AFP via Getty Images
Key Takeaways
- In a press release, Boeing said the deal is an all-stock transaction valued at $4.7 billion or $37.25 per share and the total transaction value will be approximately $8.3 billion—including Spirit’s last reported debt.
- The share price of Spirit—the supplier which manufactures the fuselage of Boeing’s troubled 737 Max jets—closed at $32.87 on Friday.
- The acquisition also covers Spirit’s defense contracts and Boeing said it will “ensure the continuity of operations” by working with the Pentagon and supplier’s other defense customers.
- Boeing’s rival Airbus will acquire “certain commercial work packages” that Spirit performs for the European plane maker.
- Additionally, Spirit plans to sell its non-Airbus operations in Belfast, Ireland, Prestwick, Scotland, and Subang, Malaysia.
- Boeing said it expects the deal to close by mid-2025.
Tangent
In a separate announcement, Airbus confirmed it has agreed to a deal to take over Spirit’s A220 and A350 parts manufacturing operations. The European plane maker will receive $559 million in compensation from Spirit as part of the deal for taking over the loss-making division and in return will make a symbolic payment of $1 for the acquisition.
Crucial Quote
Boeing CEO Dave Calhoun, who is stepping down at the end of this year, framed the acquisition as a way for Boeing to improve its safety and quality standards. He said: “By reintegrating Spirit, we can fully align our commercial production systems, including our Safety and Quality Management Systems, and our workforce to the same priorities, incentives and outcomes – centered on safety and quality.”
Key Background
Spirit, which makes fuselages for Boeing 737 and 787 jets along with other airframe components, was formed in 2005 after Boeing spun off and sold its fuselage manufacturing plant in Wichita, Kansas. After spinning it off, Boeing remained Spirit’s biggest customer, but the supplier has come under scrutiny over quality and safety issues.
The fuselage of the Alaska Airlines plane whose door plug blew out after take off earlier this year was manufactured at Spirit’s factory.
An investigation by the National Transportation Safety Board found workers at Boeing’s Renton facility had failed to secure the door plug with the four required safety bolts. However, the investigators also found the plane’s fuselage had defective rivets around the door plug when Spirit delivered it to Boeing.
In February, Spirit said despite an increase in aircraft deliveries in 2023, the company’s operations had lost $633 million.
This article was first published on forbes.com and all figures are in USD.
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