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Boeing proposes acquisition of Spirit AeroSystems Holdings in predominantly stock-funded deal

image credit: Boeing

Boeing has proposed to acquire Spirit AeroSystems Holdings in a deal primarily funded by stock, valuing the key supplier at approximately $35 per share, according to a report from Bloomberg News on Monday. The offer represents a nearly 6% premium over Spirit’s closing price of $33.07 on Monday and a 22.4% increase from its closing price on February 29, the day before news of Boeing’s takeover talks emerged.

Initially, Boeing had planned an all-cash offer. However, the latest proposal, still under discussion, may include a small cash component. Bloomberg indicates the deal could be finalized and announced within days.

Spirit AeroSystems responded by stating it remains “focused on providing the best quality products for our customers.” Boeing has yet to comment on the matter.

The discussions to reacquire the Wichita, Kansas-based supplier, which Boeing spun off in 2005, began earlier this year. Boeing aims to stabilize a critical part of its supply chain, particularly following a mid-air blowout on a new 737 MAX in January. The acquisition is seen as a move to ensure safety and quality in Boeing’s plants, addressing issues of incomplete or faulty parts supplied by Spirit.

However, negotiations have faced challenges, notably concerning Spirit’s work for Airbus. The European aerospace giant has threatened to block any agreement involving Boeing producing parts for Airbus’s latest models. As a result, the deal may necessitate Spirit spinning off some manufacturing plants to Airbus.

Previous reports from Reuters highlighted that Boeing and Airbus have largely agreed to divide Spirit’s programs, with each taking back specific work aligned with their interests.

Spirit AeroSystems reported a significant net loss of $617 million and a cash burn of $444 million in the first quarter, surpassing analysts’ expectations.

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