Boeing has made a strategic move to acquire Spirit AeroSystems Holdings in a deal primarily structured around stock, aiming to fortify its supply chain resilience and quality control. According to Bloomberg News, citing sources familiar with the matter, Boeing’s offer values Spirit AeroSystems at approximately $35 per share. This represents a premium of nearly 6% over Spirit’s closing stock price of $33.07 on Monday and a significant 22.4% increase from its closing price on February 29, just before news of Boeing’s interest in acquiring Spirit became public.
Initially considering an all-cash offer, Boeing shifted gears to include a substantial portion of stock in the proposed deal. Final negotiations are reportedly underway, with the deal expected to be finalized and announced in the coming days. While specifics of the current offer are still being ironed out, it is likely to involve a small cash component, enhancing the attractiveness of the deal for Spirit shareholders.
Boeing’s decision to pursue Spirit AeroSystems comes amidst concerns over supply chain disruptions and quality issues, particularly following incidents such as the mid-air blowout involving a new 737 MAX aircraft earlier this year. By integrating Spirit more closely into its operations, Boeing aims to exert greater control over the production and quality assurance of crucial components for its aircraft.
Spirit AeroSystems, based in Wichita, Kansas, was originally spun off from Boeing in 2005. The acquisition bid reflects Boeing’s strategic imperative to stabilize and optimize its supply chain, thereby enhancing safety and reliability across its manufacturing plants. Boeing has previously pointed fingers at Spirit for delivering incomplete or defective parts to its assembly lines, prompting efforts to bring critical manufacturing capabilities back in-house.
However, negotiations between Boeing and Spirit hit a snag over Spirit’s contractual commitments to Airbus, Boeing’s European rival. Airbus has reportedly expressed opposition to any deal that involves Boeing assuming control over parts production critical to Airbus’s newest aircraft models. To address these concerns, the proposed acquisition may necessitate Spirit to divest certain manufacturing facilities or contracts related to Airbus, a move aimed at appeasing regulatory and competitive pressures.
In financial terms, Spirit AeroSystems has faced challenges, posting a substantial net loss of $617 million and burning through $444 million in cash during the first quarter of the year. These figures exceeded analysts’ expectations, underscoring the financial pressures and operational hurdles that Boeing seeks to address through the acquisition.
The impending acquisition of Spirit AeroSystems by Boeing signifies a strategic maneuver to strengthen its market position, enhance operational efficiency, and mitigate risks associated with its supply chain. As Boeing moves forward with finalizing the deal, stakeholders and industry observers will closely monitor developments that could potentially reshape the dynamics of the aerospace manufacturing sector.