Boeing announced Monday that it will acquire its struggling supplier, Spirit AeroSystems, in an all-stock transaction valued at $4.7 billion.
The deal is aimed at addressing Boeing's ongoing safety and regulatory challenges, and culminates months of negotiations with the planemaker looking to stabilize its supply chain amid recent crises, Reuters reported.
The comprehensive transaction, which includes Spirit's reported net debt, amounts to approximately $8.3 billion. It will bring Spirit back under Boeing's wing after two decades apart.
According to Boeing, each share of Spirit common stock will be exchanged for Boeing common stock at an exchange ratio between 0.18 and 0.25. This results in an equity value of about $37.25 per share.
"We believe this deal is in the best interest of the flying public, our airline customers, the employees of Spirit and Boeing, our shareholders and the country more broadly," Boeing President and CEO Dave Calhoun said in a statement.
"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," Calhoun added.
The deal will encompass nearly all Boeing-related commercial operations, along with additional commercial, defense, and aftermarket activities.
As part of the agreement, Boeing said it would ensure smooth operational continuity for Spirit's customers and programs, including collaboration with the U.S. Department of Defense and Spirit's defense clients on defense and security missions.
"We are proud of the role Boeing plays in supporting our men and women in uniform and are committed to ensuring continuity for Spirit's defense programs," said Calhoun.
Meanwhile, Airbus will take over certain commercial work packages currently handled by Spirit for the European aircraft manufacturer once the Boeing merger is finalized.
Airbus said it will be compensated by a payment of $559 million from Spirit AeroSystems, for a nominal consideration of $1.00, subject to adjustments based on the final transaction perimeter.
Spirit AeroSystems also plans to divest specific operations, including those in Belfast, Northern Ireland (excluding Airbus operations), Prestwick, Scotland, and Subang, Malaysia.
The transaction is anticipated to close by mid-2025. This acquisition forms part of a broader strategy between Boeing and Airbus, the leading global commercial aircraft producers, to delineate Spirit's facilities.
The arrangement ensures that the former Boeing subsidiary, which also supplies parts to Airbus, remains independent in its operations to avoid potential conflicts of interest in manufacturing key aircraft components.
PJT Partners is serving as Boeing's lead financial advisor, with Goldman Sachs & Co, LLC, and Consello providing additional advisory support. Legal counsel for Boeing is being handled by Sullivan & Cromwell LLP.
