Boeing to Buy Back Struggling Fuselage Maker Spirit AeroSystems in $8.3 Billion Deal
Boeing Co. has announced that it will acquire its struggling fuselage maker, Spirit AeroSystems, in an all-stock deal worth $8.3 billion. The deal is expected to improve safety and quality control at Boeing, and is seen as a significant step towards strengthening the company’s commitment to quality.
Background
Spirit AeroSystems is a leading supplier of fuselage sections for Boeing’s 737 and other aircraft. However, the company has been facing financial difficulties in recent years, with its shares trading at a significant discount to its peers. Boeing has been Spirit’s largest customer, accounting for about 70% of its revenue last year.
The Deal
Under the terms of the deal, Boeing will pay $37.25 per share in Boeing stock for Spirit, giving the plane supplier an equity value of $4.7 billion. Including Spirit’s debt, the deal has a transaction value of $8.3 billion. The deal is subject to approval by regulators, Spirit shareholders, and the sale of Spirit’s operations dedicated to Airbus planes.
Why the Deal Matters
The deal is significant for several reasons. Firstly, it will allow Boeing to take full control of its supply chain and improve quality control. Secondly, it will give Boeing a greater say in the design and manufacturing of its aircraft, which could lead to improvements in safety and performance. Finally, the deal is seen as a vote of confidence in Spirit’s future prospects, and could help to stabilize the company’s finances.
Implications for Airbus
The deal also has implications for Airbus, which is the largest competitor to Boeing in the commercial aircraft market. Airbus has reached an agreement with Spirit to acquire its manufacturing lines dedicated to Airbus planes, which includes operations in Belfast, Northern Ireland, and North Carolina. The deal is seen as a significant blow to Airbus, which had been relying on Spirit to supply it with fuselage sections.
Conclusion
The acquisition of Spirit AeroSystems by Boeing is a significant development in the commercial aircraft market. The deal is expected to improve safety and quality control at Boeing, and will give the company greater control over its supply chain. It is also seen as a vote of confidence in Spirit’s future prospects, and could help to stabilize the company’s finances.
FAQs
Q: What is the significance of the deal?
A: The deal is significant because it will allow Boeing to take full control of its supply chain and improve quality control.
Q: What is the transaction value of the deal?
A: The transaction value of the deal is $8.3 billion, including Spirit’s debt.
Q: What are the implications for Airbus?
A: The deal is seen as a significant blow to Airbus, which had been relying on Spirit to supply it with fuselage sections.
Q: What is the timeline for the deal?
A: The deal is subject to approval by regulators, Spirit shareholders, and the sale of Spirit’s operations dedicated to Airbus planes. It is expected to close in mid-2025.
Q: What is the impact on Boeing’s shares?
A: Boeing’s shares have shed more than 28% this year, but the deal is seen as a positive development for the company.
Q: What is the impact on Spirit’s shares?
A: Spirit’s shares are up close to 7% through Monday’s close, as investors welcome the deal as a positive development for the company.
Author: www.cnbc.com
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