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Tuesday, July 16, 2024

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Boeing to Acquire Spirit Aero in $4.7 Billion Deal After Months of Talks

Photo Credit: REUTERS

On July 1, Boeing (BA.N) announced its acquisition of struggling supplier Spirit AeroSystems (SPR.N) in a $4.7 billion all-stock deal. The agreement, finalized after extensive negotiations, aims to address a safety and regulatory crisis affecting Boeing’s key supplier.

Boeing clarified that the total transaction value amounts to approximately $8.3 billion, inclusive of Spirit’s net debt as reported previously.

Under the terms, each share of Spirit common stock will convert into Boeing common stock at an exchange ratio ranging between 0.18 and 0.25, resulting in an equity value of approximately $37.25 per share.

Boeing further disclosed that Airbus will assume specific commercial work packages currently handled by Spirit once the Boeing-Spirit merger concludes. Additionally, Spirit plans to divest certain operations, including those located in Belfast, Northern Ireland (excluding Airbus-related operations), Prestwick, Scotland, and Subang, Malaysia.

The transaction is anticipated to close by mid-2025. This acquisition is part of a broader arrangement between Boeing and Airbus to restructure Spirit facilities, separating those serving Airbus from those supporting Boeing.

Spirit, originally a Boeing subsidiary, also supplies Airbus, which prefers to avoid reliance on Boeing for critical aircraft components.

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