Sections of the Boeing Co. 737 fuselage sit on the assembly floor at Spirit AeroSystems in Wichita, Kansas.
Daniel Acker | Bloomberg | Getty Images
Boeing said Monday it will buy its troubled fuselage maker Spirit AeroSystems in a deal for all of its inventory that the planemaker says will improve safety and quality control.
It said it agreed to pay $37.25 per Boeing share for Spirit, giving the aerospace company an equity value of $4.7 billion. Including Spirit’s debt, the deal is worth $8.3 billion, Boeing said. Spirit shares closed Friday at $32.87 per share, giving it a market capitalization of about $3.8 billion.
Boeing revealed in March that it was in talks to acquire the Wichita, Kansas-based company, weeks after a fuselage panel blew off a nearly new Boeing 737 Max 9 mid-air on an Alaska Airlines flight, triggering a new crisis for Boeing. Spirit makes the 737 fuselages and other parts, including sections of Boeing’s 787 Dreamliners.
In 2005, Boeing spun off its Kansas and Oklahoma operations, which became what is now Spirit AeroSystems. Boeing accounted for about 70% of Spirit’s revenue last year, while about a quarter came from making parts for Boeing’s main rival, Airbus, according to a filing with securities regulators.
CEO Dave Calhoun, who has said he will step down at the end of the year, said Monday that bringing Spirit internally would “fully align” the companies’ production systems and workforces.
“Among the many steps we are taking as a company, this is one of the most important to demonstrate our unwavering commitment to strengthening quality and ensuring Boeing is the company the world needs,” Dave Calhoun said in a message to employees.
He said he expects the deal to close in mid-2025, subject to approval from regulators, Spirit shareholders and the sale of Spirit’s dedicated Airbus aircraft operators.
Spirit CEO Pat Shanahan is seen as a possible replacement for Calhoun.
Airbus, meanwhile, announced Monday that it had reached an agreement with Spirit for the European planemaker to receive $559 million in compensation from Spirit for the acquisition of its manufacturing lines dedicated to Airbus aircraft. These include operations in Belfast, Northern Ireland, where the A220 wings and mid-fuselage are produced, A220 pylons in Wichita, Kansas, and A350 fuselage sections in North Carolina.
A preliminary National Transportation Safety Board report on the Jan. 5 crash says it appears the bolts that hold the door plug in place were not attached to the Max 9 when it left the Boeing factory and was handed over to Alaska Airlines months before the accident. accident.
It was the most serious in a series of production problems on Boeing planes, which also affected fuselages made by Spirit that had improperly drilled holes and poorly connected fuselage panels.
The crisis over the Alaska flight’s doors has slowed Boeing’s deliveries to airlines and led to financial losses for both Spirit and Boeing. In May, Boeing’s chief financial officer said the company would burn rather than generate cash this year, about $8 billion in the first half of 2024. Boeing shares have fallen more than 30% this year.
One of the ways Boeing has tried to improve quality is to accept only defect-free fuselages so that repairs or additional manufacturing steps do not have to be done out of order, thereby reducing the chance of errors.
The Federal Aviation Administration said it would not let Boeing increase production until it was satisfied with its production lines.
Calhoun was skewered by lawmakers during a Senate hearing in June over the company’s safety record and what some senators lamented was a lack of improvement following two fatal Max crashes.
News Source : www.cnbc.com
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