Dive Brief:
- Boeing reached an agreement to acquire Spirit AeroSystems for $4.7 billion on Sunday, following months of discussion.
- The all-stock deal is valued at $4.7 billion. Boeing will also take on Spirit AeroSystem’s roughly $4 billion in debt, for a total value of $8.3 billion.
- The agreement includes acquiring Spirit AeroSystems’ facilities in Wichita, Kansas; Tulsa, Oklahoma; and Dallas, according to a Boeing presentation. The deal is expected to close in mid-2025.
Dive Insight:
Spirit AeroSystems was once a Boeing subsidiary, until the company sold it in 2005. Since then, Boeing has been the fuselage supplier’s biggest customer.
“By reintegrating Spirit, we can fully align our commercial production systems, including our Safety and Quality Management Systems, and our workforce to the same priorities, incentives and outcomes – centered on safety and quality,” Boeing President and CEO Dave Calhoun said in a statement.
The deal comes as Spirit sits in a precarious financial position. The company lost $616.7 million in Q1 as a result of stalled pricing negotiations with Airbus as well as its attempts to address manufacturing quality issues with Boeing, Spirit AeroSystems said in a May securities filing.
Spirit AeroSystems also produces parts for another major aircraft manufacturer, Airbus. The supplier produced the France-based company’s A220 pylons in Wichita, A350 fuselage sections in Kinston, North Carolina, and St. Nazaire, France; and A220 wings and mid-fuselage in Belfast, Ireland, and Casablanca, Morocco.
With Boeing set to acquire Spirit AeroSystems’ facilities, Airbus will obtain Spirit’s production lines that made its plane parts both in the U.S. and overseas, according to an Airbus announcement. Spirit AeroSystems will also pay Airbus $559 million as part of the deal. The transaction is expected to close in mid-2025.
Spirit AeroSystems is looking to sell off non-related Boeing and Airbus operations at its facilities in Biddeford, Maine; Woonsocket, Rhode Island; Belfast; Prestwick, Scotland, and Subang, Malaysia, according to the company’s July 1 securities filing.
Increased federal oversight of Boeing and Spirit AeroSystems’ manufacturing in recent months stalled the supplier’s production speed, causing both Boeing and Airbus to deliver fewer planes. Last week, Airbus updated its 2024 delivery guidance, decreasing its forecasted commercial aircraft deliveries from around 800 to 770 planes.
Boeing has only allowed fully inspected fuselages at the Wichita plant to be shipped to its plant in Renton, Washington, the company said in March. The increased oversight resulted in fuselage units building up at the Wichita facility, resulting in higher levels of inventory amounting to approximately $1.8 billion.
