Boeing agreed to buy back Spirit AeroSystems for $4.7 billion in stock, while Airbus pursued the supplier’s European operations.
The 737 MAX crisis ended the two-decade independence of the top aerostructures firm, highlighting fuselage manufacturing doubts.
Boeing, having spun off Spirit’s Wichita and Oklahoma plants in 2005, will repurchase it for $37.25 per share, valuing it at $8.3 billion.
“Bringing Spirit and Boeing together will enable greater integration of both companies’ manufacturing and engineering capabilities, including safety and quality systems,” Spirit CEO Pat Shanahan stated.
Spirit shares increased by 3.6% in early U.S. trading, while Boeing climbed 2%.
The Wichita company said the deal offers a 30% premium, following Boeing and Spirit’s March 1 talks announcement.
Boeing has considered repurchasing its former subsidiary, which, despite diversifying, has struggled independently, analysts say.
Boeing aims to overcome challenges following a Jan. 5 door plug blowout on a new Alaska Airlines 737 MAX 9, revealing quality issues.
These issues have significantly slowed Boeing’s output, consequently impacting the global commercial aviation industry.
Fitch said the deal will benefit Boeing, enhancing its planning and control of future 737 MAX production.
Following the crisis, U.S. planemaker announced CEO Calhoun’s departure, with Shanahan, former Boeing executive, suggested as a replacement.
It remains unclear how long he’ll stay with Spirit, as the Boeing deal won’t close until mid-2025.
According to Bernstein analyst Douglas Harned, the deal “should add clarity… potentially for the Boeing board’s attention to move to the decision on the next CEO” in a letter to investors.
Airbus Takes Control as Spirit Shifts Focus
Spirit, spun off from Boeing, exemplifies a shift towards cost-cutting rather than quality, critics argue.
Boeing decided to repurchase it following the door plug incident, aiming to resolve safety issues and stabilize production.
Boeing’s plans for Spirit’s work for Airbus sparked concerns. Airbus CEO warned readiness to veto plant control changes.
Airbus announced Monday it will assume key operations at four supplier plants globally.
Additionally, it will assume lesser tasks in Wichita. The Airbus deal followed Boeing-Spirit talks, loosely coordinated among them, pending due diligence.
Airbus stock increased nearly 3.3% on Monday.
Given Spirit’s Airbus-related losses, reports indicated Airbus sought $1 billion for acquiring its A350 and A220 plants.
Airbus will receive $559 million from Spirit, contingent on the deal’s final terms, and pay Spirit $1 for its assets.
Similarly, Airbus acquired Bombardier’s CSeries jetliner program for $1 in 2018, rebranding it as the A220.
Recently, Airbus unexpectedly decided to take over the Belfast-based A220 wings manufacturing, previously owned by Spirit after Bombardier sold it in 2019.
Monday’s agreement alleviates concerns about Northern Ireland’s leading industrial employer. However, Airbus might need substantial investments to boost wing production affordability.
Spirit intends to divest operations in Prestwick, Scotland and Subang, Malaysia, supporting Airbus, and Belfast, not supporting Airbus.
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