Boeing’s 737 fuselage parts are located at Spirit AeroSystems’ assembly shop in Wichita, Kansas.
Daniel Acker | Bloomberg | Getty Images
boeing company Said Monday it would buy back troubled airframe maker spirit aerospace systems inc. The planemaker said the all-stock deal will improve safety and quality control.
The company said it agreed to acquire Spirit for $37.25 per Boeing stock, giving the aircraft supplier an equity value of $4.7 billion. Boeing said the deal, including Spirit’s debt, has a transaction value of $8.3 billion. Spirit’s stock price closed at $32.87 per share on Friday, giving it a market capitalization of approximately $3.8 billion.
Boeing revealed in March Negotiating acquisitions The Wichita, Kan.-based company’s decision comes weeks after a fuselage panel on a nearly new Boeing 737 Max 9 exploded in mid-air. Alaska Airlines flight, triggering a new crisis for Boeing. Spirit makes 737 fuselages and other parts, including some for Boeing’s 787 Dreamliner.
In 2005, Boeing spun off operations in Kansas and Oklahoma to become Spirit AeroSystems. Boeing accounted for about 70% of Spirit’s revenue last year, with about a quarter coming from producing parts for Boeing’s main rival Airbus, according to a securities filing.
Boeing Chief Executive Dave Calhoun, who has said he will resign at the end of the year, said on Monday that bringing Spirit in-house would “completely restructure” the company’s production systems and workforce.
“This is one of the most important of the many actions we have taken as a company and demonstrates our unwavering commitment to strengthening quality and ensuring that Boeing is the company the world needs,” Calhoun said in the letter. company of.
He said he expected the deal to close in mid-2025, subject to approval from regulators, Spirit shareholders and the sale of Spirit’s business, which specializes in building Airbus aircraft.
Spirit CEO Pat Shanahan has been considered a possible successor to Calhoun.
Meanwhile, Airbus said on Monday it had reached an agreement with Spirit to provide the European planemaker with $559 million in compensation to acquire its production lines dedicated to building Airbus planes. These include plants in Belfast, Northern Ireland, that produce A220 wings and mid-fuselage sections, A220 pylons in Wichita, and A350 fuselage sections in North Carolina. Airbus will pay $1 for the assets.
Installation pressure
The deal comes as Boeing is still dealing with the fallout from a fuselage explosion earlier this year.
U.S. prosecutors plan to bring charges against Boeing Co. plea agreement The company is implicated in a conspiracy to commit fraud charge related to the development of the 737 Max aircraft, two of which crashed in 2018 and 2019, killing all 346 people on board, according to lawyers for the victims’ families.
In May, months after the Alaska accident, the Justice Department said Boeing violated a 2021 settlement that protected it from prosecution because it allegedly failed to install and maintain certain compliance programs .
The National Transportation Safety Board’s preliminary report into the Jan. 5 Alaska Airlines accident said the bolts holding the door jams did not appear to have been installed on the Max 9 when it left the Boeing factory and was handed over to Alaska Airlines.
It is the most serious of a series of production problems for Boeing aircraft, which also include faulty drilling and faulty attachment of fuselage panels in the Spirit-built fuselage. One way Boeing is trying to improve quality is by only accepting airframes that are free of defects so that repairs or additional manufacturing steps don’t have to be sequenced, reducing the chance of errors.
The broader safety crisis triggered by a blown door jam on an Alaskan flight has slowed Boeing’s delivery of new planes to airlines and dealt a financial blow to Spirit Airlines and Boeing Co. Boeing’s chief financial officer said in May that the company would Burning money instead of generating cash This year—the first half of 2024—about $8 billion.
The Federal Aviation Administration said it would not let Boeing expand production until it was satisfied with its production lines.
Calhoun is Being skewered by legislators A Senate hearing in June was held on the company’s safety record, with some senators lamenting the lack of improvements after two fatal Max crashes.
As of Monday’s close, Boeing shares had fallen more than 28% this year, while Spirit Airlines shares were up nearly 7%.
