Boeing set to acquire Spirit AeroSystems in $4.7 billion deal

The major plan manufacturer is purchasing one of its key suppliers.

Boeing has announced its plans to acquire key supplier Spirit AeroSystems for $4.7 billion, a move aimed at improving plane quality and safety amid increasing scrutiny from Congress, airlines, and the Department of Justice.

This acquisition is a reversal of Boeing’s previous strategy of outsourcing work on its passenger planes and follows criticism of problems at Spirit that disrupted production and delivery of popular Boeing jetliners, including 737s and 787s.


What they’re saying: Boeing’s President and CEO, Dave Calhoun, stated that the deal is in the best interest of the flying public, airline customers, the employees of Spirit and Boeing, shareholders, and the country as a whole.

“We believe this deal is in the best interest of the flying public, our airline customers, the employees of Spirit and Boeing, our shareholders and the country more broadly,” Calhoun said. 

Driving the news: Safety concerns have been prominent following a panel blowout on an Alaska Airlines 737 Max 9 in January, leading to increased oversight of Boeing and Spirit by the Federal Aviation Administration. 

  • The Alaska Airlines incident involved Spirit, the supplier of the fuselage for the plane.
  • The U.S. Justice Department has pressured Boeing to plead guilty to criminal fraud in connection with the two deadly plane crashes involving its 737 Max jetliners over five years ago.
  • Boeing has until the end of the week to accept or reject the offer, which includes an independent monitor overseeing its compliance with anti-fraud laws, according to federal prosecutors.
  • The Justice Department alleges that Boeing violated terms of a 2021 settlement that allowed the company to avoid prosecution for actions leading up to the crashes in Ethiopia and Indonesia, which resulted in 346 fatalities.

The big picture: Spirit, which was spun off by Boeing in 2005, has faced mounting quality problems in recent years, including issues with ill-fitting fuselage panels and improperly drilled holes.

  • The acquisition of Spirit by Boeing is expected to enable better integration of manufacturing and engineering capabilities, including safety and quality systems.
  • The equity value of the acquisition is $4.7 billion, with a total value of around $8.3 billion, factoring in Spirit’s net debt. Boeing common stock will be exchanged for Spirit shares based on a variable formula tied to the share price.
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