Business

Boeing agrees to buy Spirit AeroSystems in €4.4bn deal

Airbus to take on parts of Spirit’s Northern Ireland business as part of wider deal

Boeing is buying back Spirit Aerosystems in part because of the fallout tied to the crisis around production issues at the manufacturer. Photograph: Ruth Fremson/The New York Times

Mon Jul 1 2024 - 07:41

Boeing has agreed to buy Spirit AeroSystems in a deal valuing the airline supplier at $4.7 billion (€4.4 billion), after months of negotiations that involved the US aircraft maker as well as its European arch-rival Airbus.

The total transaction value is about $8.3 billion, including Spirit’s last reported net debt, said Boeing. The deal, which values the supplier at about $37.25 per share, will bring Spirit back under Boeing’s wing after two decades apart.

Spirit clinched a deal with Boeing after it reached a separate agreement with Airbus, with the European group taking over parts of the aerospace supplier’s work on some of its own key aircraft programmes.

As part of that, Airbus will assume the work that Spirit does for its A220 and A350 aircraft programmes at several sites around the world, including Northern Ireland, the US, France and Morocco.

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Airbus will receive $559 million in compensation from Spirit for taking over the lossmaking work, with the European planemaker paying a symbolic $1 for the assets.

Spirit said it planned to sell some businesses, including at Belfast, Northern Ireland, that are non-Airbus related, as well as operations at Prestwick, Scotland and in Malaysia.

The aerospace supplier, which makes the body of Boeing’s 737 Max jet, has come under scrutiny over manufacturing problems that have slowed the production of the aircraft. Last year, Spirit’s chief executive was replaced by former Boeing executive Patrick Shanahan.

Boeing has been in talks with Spirit since March. Boeing had spun off the parts builder in 2005 but remained its biggest customer. It has said repurchasing the airline supplier would boost safety in the manufacturing process.

This has been a key goal for the Seattle-based company after the mid-air blowout of a section of the main body of one of its 737 Max aircraft in January.

“By reintegrating Spirit, we can fully align our commercial production systems, including our safety and quality management systems, and our workforce to the same priorities, incentives and outcomes — centred on safety and quality,” said Boeing chief executive Dave Calhoun.

Boeing said it expects the deal to close by mid-2025. It is being advised on the deal by PJT Partners as well as Goldman Sachs and Consello, while Sullivan & Cromwell is its legal adviser. Spirit is being advised on the terms by Morgan Stanley and Moelis, while its legal counsel was -- Copyright The Financial Times Limited 2024

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