Global aviation giant Boeing announced on Sunday (June 30) that it will repurchase Spirit AeroSystems, a leading aerospace manufacturer, in a $4.7 billion all-stock deal after months of negotiations. Boeing had split from this parts manufacturer in 2005 but remains its largest customer.
In a statement on Sunday, Boeing’s President and CEO Dave Calhoun announced the deal, emphasizing that the acquisition is in the best interest of air travelers, airline customers, employees of both Spirit and Boeing, as well as the entire nation.
The equity value of this acquisition is $4.7 billion at $37.25 per share, with a total transaction value of approximately $8.3 billion, including Spirit’s net debt.
The statement also mentioned the integration of commercial production systems through the merger, focusing on safety, quality management systems, employee workforce, incentive measures, and results centered around safety and quality.
Calhoun stated that Boeing’s acquisition of Spirit includes all business operations related to Boeing, as well as other commercial, defense, and aftermarket market activities.
As part of the deal, Boeing will collaborate with Spirit to ensure continuous support for Spirit’s customers and the acquired projects, including cooperation with the US Department of Defense and Spirit’s defense business clients on defense and security missions.
This transaction marks Spirit AeroSystems rejoining Boeing’s umbrella after two decades of separation. Spirit’s President and CEO Patrick Shanahan mentioned that this merger will allow greater integration of the manufacturing and engineering capabilities of both companies, including safety and quality systems.
The deal is expected to be completed by mid-2025, subject to the sale of Spirit’s Airbus commercial business, regulatory approval, and approval from Spirit’s shareholders, among other factors.
According to the Associated Press, the repurchase of Spirit will reverse Boeing’s long-standing strategy of outsourcing key aircraft work to consolidate its production lines.
In January this year, an Alaska Airlines 737 Max9 aircraft experienced a door seal rupture incident at 16,000 feet over Oregon, raising concerns about safety. The Federal Aviation Administration subsequently announced increased oversight of Boeing and Spirit.
In a court filing in May, the Department of Justice stated that Boeing had violated the terms of a 2021 settlement agreement, which allowed Boeing to avoid prosecution over two fatal crashes of its 737 Max jets more than five years ago.
Sources familiar with the matter revealed that the Department of Justice is pushing Boeing to admit to criminal fraud related to the two fatal crashes involving its 737 Max jets.
Boeing and Spirit also announced a deal with Airbus for the assets associated with Airbus operations at Spirit. The agreement with Airbus will take effect after Boeing completes the acquisition of Spirit.
Additionally, as reported by Reuters last week, Airbus confirmed that it will take over the core operations of four factories in the United States, Northern Ireland, France, and Morocco from Spirit for hundreds of millions of dollars in compensation.
Due to Airbus’s related business losses, industry insiders disclosed that Airbus demanded up to $1 billion in compensation for taking over these factories, which produce strategic components for A350 and A220 jets.
Airbus announced that it will receive $559 million in compensation from Spirit, depending on the final terms of the transaction, and Airbus will symbolically pay $1 to suppliers.
Airbus’s stock price rose by 2.4% at the opening on Monday.