Boeing Co. agreed Sunday to buy Spirit AeroSystems Holdings Inc. for $37.25 per share in a stock deal that values the company at $4.7 billion, according to people with knowledge of the transaction.
The U.S. plane maker also plans to assume about $3.5 billion of Spirit’s debt as part of the deal, which could be announced as soon as Monday, said the people, who asked not to be identified before it is made public. Reuters reported the stock price earlier on Sunday. Company representatives declined to comment.
Boeing plans to control production of the Spirit that supports its commercial jet program, including the frames that make up the cash cow 737 Max, two of the people said. It will also be able to control a portion of Spirit’s defense contract work, they said.
Boeing’s main rival Airbus SE is also expected to announce that it is taking control of some of Spirit’s factories that produce structures and parts for its commercial aircraft. Terms of the transaction were not immediately available.
Boeing is seeking to merge Spirit after the January crash on the 737 Max-9 plane exposed quality and manufacturing flaws at both Boeing and its most important suppliers and led to a rethink of their relationship.
Spirit has faced mounting financial pressure and scrutiny from Boeing after a door-shaped panel on its 737 Max 9 model exploded minutes after takeoff. Shipments of 737 fuselages have slowed as Boeing ramps up its testing in Kansas and returns home near Seattle, and has refused to accept aircraft structures with missing parts or 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 experiencing financial difficulties due to declining performance. Boeing lost about $4 billion in the first quarter and will lose the same amount in the current three months of the year. The company’s debt ratio is higher than the forecast range, and management is determined to avoid slipping into junk territory.
The Wichita campus that builds most of Boeing’s 737 airframes and nose parts for 787 Dreamliners has been at the heart of several failures as it deals with post-Covid workforce changes. Reintegrating Spirit aims to help Boeing stabilize its supply chain and gain greater control over the production of its aircraft.
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