Boeing to acquire fuselage manufacturer Spirit AeroSystems for $4.7 billion
Boeing announced on Monday that it will reacquire its struggling fuselage manufacturer, Spirit AeroSystems, in an all-stock deal aimed at improving safety and quality control. Boeing will pay $37.25 per share in stock for Spirit, valuing the equity at $4.7 billion, with the total transaction, including Spirit’s debt, reaching $8.3 billion. Spirit’s shares closed at $32.87 on Friday, giving it a market capitalization of about $3.8 billion.
Boeing had disclosed in March that it was in talks to acquire the Wichita, Kansas-based company, following a fuselage panel blowout on a Boeing 737 Max 9 during an Alaska Airlines flight, which triggered a new crisis for Boeing. Spirit manufactures fuselages for the 737 and other components, including sections of Boeing’s 787 Dreamliners.
Boeing spun off its Kansas and Oklahoma operations in 2005, forming the present-day Spirit AeroSystems. Last year, Boeing accounted for about 70% of Spirit’s revenue, with roughly 25% coming from producing parts for Airbus, according to a securities filing.
CEO Dave Calhoun, set to step down at the end of the year, stated that reintegrating Spirit will “fully align” the production systems and workforces of the two companies. He emphasized that this move demonstrates Boeing’s commitment to improving quality and meeting global needs. The deal is expected to close by mid-2025, pending approval from regulators, Spirit shareholders, and the sale of Spirit’s Airbus-dedicated operations.
Pat Shanahan, CEO of Spirit, is a potential successor to Calhoun. Airbus announced it had reached an agreement with Spirit to be compensated $559 million for acquiring Spirit’s manufacturing lines dedicated to Airbus, including operations in Belfast, Northern Ireland; Wichita, Kansas; and North Carolina.
The National Transportation Safety Board’s preliminary report on the January 5 incident revealed that bolts holding a door plug were not attached when the Max 9 left Boeing’s factory. This incident was the most serious among various production issues, including misdrilled holes and misconnected fuselage panels from Spirit.
The door-plug blowout has delayed Boeing’s new plane deliveries and caused financial strain for both companies. Boeing’s CFO indicated that the company expects to burn $8 billion in cash in the first half of 2024. Boeing’s shares have dropped over 30% this year.
Boeing has tried to improve quality by only accepting defect-free fuselages, reducing the need for out-of-sequence repairs. The Federal Aviation Administration will not allow Boeing to expand production until it meets satisfactory production standards. Calhoun faced criticism from lawmakers in a June Senate hearing over Boeing’s safety record following two fatal Max crashes.