Brief news
Boeing has announced an all-stock deal to acquire Spirit AeroSystems, a struggling fuselage builder, to improve safety and quality control. The acquisition is worth $8.3 billion, including Spirit’s debt, and has been in talks since March following a Boeing 737 Max 9 fuselage panel explosion on an Alaska Airlines aircraft. Spirit manufactures 737 fuselages and parts for Boeing’s 787 Dreamliners. Boeing CEO Dave Calhoun expects the acquisition to finish mid-2025, pending regulator approval, Spirit shareholder approval, and the sale of Spirit’s Airbus-focused operators. Spirit CEO Pat Shanahan could replace Calhoun. Boeing’s shares have fallen over 30% this year, and the company must accept only fuselages without defects to avoid out-of-order repairs or production procedures.
Illustrated news
On Monday, Boeing announced an all-stock deal to acquire Spirit AeroSystems, a struggling fuselage builder, to enhance safety and quality control.
The aerospace company’s equity worth was $4.7 billion after it paid $37.25 each Boeing share for Spirit. Boeing said the acquisition is worth $8.3 billion, including Spirit’s debt. Friday’s closing price of $32.87 gave Spirit a market valuation of $3.8 billion.
Boeing announced in March that it was in talks to acquire Wichita-based business, following a recent Boeing 737 Max 9 fuselage panel explosion on an Alaska Airlines aircraft, causing a new crisis for Boeing. Spirit manufactures 737 fuselages and pieces for Boeing’s 787 Dreamliners.
Boeing split off Kansas and Oklahoma businesses into Spirit AeroSystems in 2005. Spirit made 70% of its income last year from Boeing and 25% from Airbus, according to a regulatory filing.
CEO Dave Calhoun, who will go at the end of the year, said Monday that bringing Spirit in-house will “fully align” production processes and workforces.
“Among the many actions we’re taking as a company, this is one of the most significant in demonstrating our unwavering commitment to strengthen quality and make certain that Boeing is the company the world needs it to be,” Dave Calhoun told staff.
He expects the acquisition to finish mid-2025, pending regulator approval, Spirit shareholder approval, and the sale of Spirit’s Airbus-focused operators.
Spirit CEO Pat Shanahan could replace Calhoun.
Airbus announced Monday that Spirit will pay $559 million to acquire its Airbus plane manufacturing lines. A220 wings and mid-fuselage are made in Belfast, Northern Ireland, A220 pylons in Wichita, Kansas, and A350 fuselage parts in North Carolina.
A growing pressure
The National Transportation Safety Board’s preliminary study on the Jan. 5 tragedy found that the door plug bolts were not secured to the Max 9 when it left Boeing’s factory and was sent to Alaska Airlines months prior.
That was the worst of Boeing’s production issues, which included Spirit-made fuselages with misdrilled holes and misconnected panels.
Spirit and Boeing have suffered financial losses due to the Alaska flight door-plug rupture, which halted Boeing’s new plane deliveries to carriers. This year, Boeing will burn $8 billion in the first half of 2024, according to its CFO in May. Boeing shares have fallen over 30% this year.
Boeing accepts only fuselages without defects to avoid out-of-order repairs or production procedures, reducing mistakes.
Boeing cannot expand output unless its production lines are satisfactory, according to the FAA.
In a June Senate hearing, members criticised Calhoun for the company’s safety record and a lack of progress after two deadly Max crashes.
Source : CNBC News
