Boeing is to buy Spirit AeroSystems for US$4.7 billion in Boeing stock and will pay Airbus US$559 million to take on the Spirit manufacturing sites which produce A350 and A220 parts.
At $37.25 per share, the agreement represents an enterprise value of approximately $8.3bn, when Spirit’s last reported net debt is included.
The companies first confirmed they were in talks about a potential merger in March, following an incident when a door panel blew out of the fuselage of an Alsaka Airlines’ Boeing 737 Max 9 mid-air. The door panel had been manufactured by Spirit, but the bolts had subsequently been removed by Boeing employees at its facility in Renton, Washington while repairing damaged rivets.
A following audit of 737 Max issues by US regulator the FAA identified several issues at Boeing and Spirit.
Wichita-headquartered Spirit is a supplier of aerostructures and was spun out of Boeing’s manufacturing operations in 2005. While most of Spirit’s business remains as a supplier to the US aircraft maker, the company has diversified its client base to other companies, including Bombardier and Airbus, complicating the terms of the acquisition.
As part of the deal, a binding term sheet has been agreed with Airbus that means negotiations will continue until definitive agreements for Airbus to acquire the Spirit assets that serve Airbus programs.
These assets include the production of A350 fuselage sections in Kinston, North Carolina and St. Nazaire, France; of the A220’s wings and mid-fuselage in Belfast, Northern Ireland and Casablanca, Morocco, and the A220 pylons in Wichita, Kansas.
The merger will only complete if the divestiture of the Airbus businesses by Spirit is successful. The merger is also subject to approval by Spirit shareholders and receipt of regulatory approvals. The deal is expected to occur in mid-2025.
Patrick M. Shanahan, president and CEO of Spirit said, “After carefully evaluating Boeing’s offer to combine, we are confident this transaction is in the best interest of Spirit and its shareholders, and will benefit Spirit’s other stakeholders.
“Bringing Spirit and Boeing together will enable greater integration of both companies’ manufacturing and engineering capabilities, including safety and quality systems.”
Dave Calhoun, president and CEO of Boeing said, “By once again combining our companies, 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 – centred on safety and quality.
“This is an opportunity to bring back critical airplane manufacturing work on Boeing airplanes into our factories – where Boeing and Spirit world-class engineers and mechanics can work seamlessly together, focused on a common mission to build safe and quality airplanes for our customers.”
