Boeing Co on Sunday agreed to acquire Spirit AeroSystems Holdings Inc. for $37.25 per share in an all-stock deal that values the company at $4.7 billion, people familiar with the matter said.
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, people familiar with the matter said. 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 operations to support its family of commercial jets, including making frames for its cash cow 737 Max, two people familiar with the matter said. It will also gain control of a portion of the Spirit’s defense contract work, they said.
Boeing’s main rival Airbus is also expected to announce that it will take over part of the Spirit plant to make structures and parts for its commercial aircraft. Terms of the deal were not immediately announced.
Boeing is seeking to reintegrate Spirit after a crash involving a 737 Max-9 airliner in January exposed quality and manufacturing flaws at Boeing and its most important suppliers and caused the company to rethink their relationship.
Spirit Airlines joins Boeing Co in facing growing financial pressure and scrutiny after a door panel on a 737 Max 9 exploded minutes after takeoff. Shipments of 737 airframes have plummeted as Boeing steps up domestic inspections in Kansas and near Seattle and refuses to accept aircraft structures that are missing parts or have incomplete work.
For Boeing, the deal brings a key supplier of the 737, 787 Dreamliner and other commercial jets back in-house at a time when the company is facing financial pressure from slowing production. Boeing lost about $4 billion in cash in the first quarter and will lose a similar amount in the three months so far this year. The company’s credit rating hovers one notch above speculative grade, and management is eager to avoid falling into junk territory.
The Wichita plant, which produces most of the 737 fuselage and the nose section of the 787 Dreamliner for Boeing, has been at the center of multiple deficiencies as it grapples with post-pandemic labor turnover. Reintegrating Spirit is designed to help Boeing stabilize its supply chain and better control its aircraft production.
