Boeing Co. agreed to the purchase on Sunday Spirit AeroSystems Holdings Inc. for $37.25 a share in an all-stock deal that values the company at $4.7 billion, people familiar with the transaction said.
The US aircraft manufacturer also plans to take on around $3.5 billion of Spirit’s debt as part of the deal, which may be announced as early as Monday, said the people, who asked not to be identified before the transaction was announced. Reuters had previously announced the price per share on Sunday. Representatives of both companies declined to comment.
Boeing wants to take control of Spirit’s production that supports its commercial aircraft lineup, including building frames for the cash cow 737 Max, two of the people said. Boeing will also gain control of some of Spirit’s defense contract work, they said.
Arch-rival Boeing airbus SE is also expected to announce that it is taking control of some of Spirit’s factories that make structures and components for its commercial aircraft. Terms of that transaction were not immediately available.
Boeing is trying to reintegrate Spirit after an accident in January aboard a 737 Max 9 passenger plane revealed quality and manufacturing deficiencies at both Boeing and its key supplier and led to a rethink of the business relationship.
Spirit, along with Boeing, is facing growing financial pressure and scrutiny after the door-shaped panel on a 737 Max 9 model burst minutes after takeoff. Deliveries of 737 fuselages have fallen sharply as Boeing intensifies its inspections in Kansas and at home near Seattle and refuses to accept aircraft structures with missing components or incomplete work.
For Boeing, the deal means bringing back a key supplier for the 737, 787 Dreamliner and other commercial aircraft at a time when the company is feeling the financial strain of reduced production. Boeing lost about $4 billion 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, and management is keen to avoid a slide into junk territory.
The Wichita campus, which builds the majority of Boeing’s 737 airframe as well as the nose sections of the 787 Dreamliner, has been hit by several defects due to post-Covid staff turnover. The reintegration of Spirit is intended to help Boeing stabilize its supply chain and gain greater control over its aircraft production.