Boeing to Acquire Spirit AeroSystems for $4.7 Billion Amid Safety Crisis
Boeing has agreed to acquire Spirit AeroSystems in a deal valued at over $4 billion, sources familiar with the matter reported on Sunday. This acquisition aims to help Boeing address its ongoing safety issues. Boeing will pay $37.25 per share for Spirit Aero in an all-stock transaction, with the boards of both companies finalizing the agreement on Sunday. An official announcement is expected early Monday.
Boeing
The deal, which values Spirit Aero at approximately $4.7 billion, requires regulatory approval. If approved, it will lead to the breakup of Spirit, with some assets going to the French planemaker Airbus. Representatives from Airbus, Spirit, and Boeing have declined to comment on the transaction.
The motivation behind Boeing’s acquisition stems from a series of difficulties that began with a mid-air incident on January 5 involving a door plug on a new 737 MAX 9 jet. This event highlighted numerous safety and quality problems, causing a significant slowdown in Boeing’s production and impacting the global aviation industry. Spirit Aero, the manufacturer of the faulty door plug, was originally spun off from Boeing in 2005, a move criticized for prioritizing cost-cutting over quality.
Following the January incident, Boeig decided to reacquire Spirit Aero as part of its efforts to address safety issues and stabilize its production line. This decision came in the wake of the incident involving an Alaska Airlines-operated flight and is seen as a step toward reforming Boeng’s safety practices.
In parallel, Spirit Aero is set to sell its Europe-focused operations to Airbus. While the terms of this deal were not immediately clear, sources indicated that both transactions would be announced together on Monday. This dual announcement marks the transatlantic breakup of Spirit Aero, the world’s largest independent aerostructures maker, which has expanded to supply parts for Airbus and others since its separation from Boeig nearly two decades ago.
The Federal Aviation Administration imposed a production cap on Boing’s 737 MAX jets after the January incident, and the U.S. Department of Justice is considering criminal prosecution if Being is found to have violated an agreement related to the fatal MAX crashes in 2018 and 2019. These crashes, which killed nearly 350 people, led to the grounding of the 737 MAX and the appointment of Dave Calhoun as Boeng’s CEO. Calhoun was tasked with resolving the company’s issues but will leave his position later this year amid increased regulatory scrutiny and a damaged reputation.
Despite the acquisition of Spirit Aero, Boeig’s challenges persist. The company has been losing market share to Airbus and continues to deal with the fallout from the twin crashes. In recent Senate hearings, U.S. senators criticized Calhoun for Boeng’s ongoing safety problems and questioned his salary. Airlines have also expressed frustration with Boing due to delivery delays and other issues.
As Being moves forward with the acquisition of Spirit Aero, the company faces the difficult task of restoring trust and improving its safety record while navigating regulatory hurdles and competitive pressures in the aviation industry.Being to Acquire Spirit AeroSystems for $4.7 Billion Amid Safety Crisis
