(Bloomberg) — Boeing Co. agreed Sunday to buy Spirit AeroSystems Holdings Inc. for $37.25 per share in an all-stock deal that values the company at $4.7 billion, according to people with knowledge of the transaction.
Bloomberg’s Most Read
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, said the people, who asked not to be identified before the transaction becomes public. Reuters reported the share price early Sunday. Representatives for the companies declined to comment.
Boeing plans to take control of Spirit’s manufacturing that underpins its line of commercial airplanes, including building frames for its 737 Max jetliner, two of the people said. It will also gain control of a portion of Spirit’s defense contract work, they said.
Boeing’s archrival Airbus SE is also expected to announce that it will take control of some of Spirit’s factories that make airframes and components for its commercial airplanes. Terms for that transaction were not immediately available.
Boeing is seeking to reinstate Spirit after a January crash aboard a 737 Max-9 aircraft revealed quality and manufacturing deficiencies at both Boeing and its largest supplier and led to a rethink of their relationship.
Spirit has faced mounting financial pressure and scrutiny alongside Boeing after a door-shaped panel on a 737 Max 9 model exploded minutes after takeoff. Shipments of 737 fuselages have plummeted as Boeing steps up inspections in Kansas and at home near Seattle and refuses to accept airframes with missing components or incomplete work.
For Boeing, the deal brings back a key supplier for the 737, 787 Dreamliner and other commercial airplanes at a time when the company is feeling financial pressure from slowing production. Boeing lost about $4 billion in cash in the first quarter and is expected to lose a similar amount in the current three months of the year. The company’s credit rating is one notch above speculative grade and management wants to avoid falling into junk territory.
The Wichita campus, which builds most of the 737 airframe for Boeing, along with the nose sections of the 787 Dreamliners, had been the center of several defects as it dealt with post-COVID staff turnover. Spirit’s reintegration is intended to help Boeing stabilize its supply chain and gain greater control of its aircraft production.
Most read from Bloomberg Businessweek
©2024 Bloomberg LP