(Bloomberg) — Boeing Co. agreed Sunday to buy Spirit AeroSystems Holdings Inc. for $37.25 a share in an all-stock deal that values ​​the company at $4.7 billion, according to people familiar with the transaction.
Bloomberg’s most read articles
The U.S. planemaker also plans to assume about $3.5 billion of Spirit’s debt as part of the deal, which could be announced as early as Monday, said the people, who asked not to be identified until the transaction is made public. Reuters reported the per-share price earlier on Sunday. Representatives for the companies declined to comment.
Boeing plans to take control of Spirit’s manufacturing that supports its line of commercial jets, including building the frames for its cash-cow 737 Max, two sources said. It will also take control of some of Spirit’s defense contracts, they added.
Boeing rival Airbus SE is also expected to announce that it is taking control of some of Spirit’s factories that make structures and components for its commercial planes. Terms of the deal were not immediately disclosed.
Boeing is seeking to reinstate Spirit after a January crash aboard a 737 Max-9 jetliner exposed quality and manufacturing flaws at Boeing and its main supplier and led to a rethink of their relationship.
Spirit is facing financial pressure and growing scrutiny alongside Boeing after a 737 Max 9 model’s door panel exploded minutes after takeoff. Shipments of 737 fuselages have plummeted as Boeing stepped up inspections in Kansas and at its home near Seattle, and refused to accept plane structures with missing components or incomplete work.
For Boeing, the deal brings back a key supplier to the 737, 787 Dreamliner and other commercial planes at a time when the company is feeling the financial strain of slowing production. Boeing lost about $4 billion in cash in the first quarter and is expected to lose a similar amount in the next three months of the year. The company’s credit rating hovers one level above junk grade, and management is keen to avoid falling into the high-yield product space.
The Wichita campus, which builds most of the 737 airframes for Boeing as well as the forward sections of the 787 Dreamliners, has been at the heart of several defects as it grapples with post-Covid staff turnover. Reintegrating Spirit aims to help Boeing stabilize its supply chain and better control its aircraft production.
Bloomberg Businessweek’s Most Read
©2024 Bloomberg LP
