BOEING agreed on Sunday to acquire Spirit AeroSystems for more than $4 billion, two people familiar with the matter said, ending months of talks over a deal the US planemaker hopes will help ease a spiraling safety crisis.
Boeing will pay US$37.25 per share for Spirit AeroSystems, in an all-stock deal, the two people said. The boards of Boeing and Spirit met on Sunday and agreed to terms, and an official announcement is likely early on Monday, they said.
The acquisition values Spirit at around US$4.7 billion, according to one of the sources.
The deal, which is subject to regulatory approvals, would result in the breakup of Spirit, with some of the Kansas-based supplier’s assets going to French planemaker Airbus.
Airbus, Spirit and Boeing declined to comment.
Boeing is trying to move past a year of difficulties sparked by a Jan 5 mid-air blowout of a door plug on a new 737 MAX 9 jet that exposed myriad safety and quality problems. Those issues have led to a substantial slowdown in output at Boeing – rippling across the global commercial aviation industry.
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Spirit, the manufacturer of the door plug, was spun off from Boeing in 2005 in one of a series of moves that critics say were emblematic of a focus on cost-cutting over quality.
Boeing made the decision to buy back Spirit in the aftermath of the Jan 5 incident, which took place on an Alaska Airlines-operated flight, as part of an effort to reform its safety problems and shore up its production line.
The terms of a parallel deal for Spirit to sell its Europe-focused operations to Airbus were not immediately clear.
People familiar said both deals were set to be announced in tandem early on Monday. The twin moves amount to a transatlantic breakup of the world’s largest independent aerostructures maker, which has branched out to make parts for Airbus and others since being spun off by Boeing nearly two decades ago.
Production cap
Following the January incident, the Federal Aviation Administration imposed a cap on production of Boeing’s best-selling MAX jets, and US Department of Justice officials are threatening criminal prosecution if they determine the planemaker violated an agreement following the fatal MAX crashes in 2018 and 2019.
Buying Spirit Aero will not immediately resolve Boeing’s issues. The iconic US company has been losing market share to Airbus for years, and it is still dealing with the aftermath of twin crashes that killed nearly 350 people and forced a grounding of the 737 MAX.
Those crashes led to the appointment of current CEO Dave Calhoun, who was brought in to resolve the problems at the manufacturer, but who will leave later this year with the company under greater regulatory scrutiny and with a reputation that has taken a beating.
US senators on June 18 sharply criticised Calhoun for the planemaker’s safety issues and repeatedly questioned him about his salary. Some airlines have vented their frustration with Boeing publicly and privately due to delivery delays and the company’s ongoing issues.
Boeing recently submitted a comprehensive plan to the FAA addressing “systemic quality-control issues” at the company. REUTERS
