Boeing said on Monday that it is going to buy back its struggling hull manufacturer Spirit AeroSystems in an all-stock deal that the aircraft manufacturer says will improve safety and quality control.
The company 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 has a transaction value of $8.3 billion, Boeing said. Spirit's shares closed Friday at $32.87 per share, giving it a market capitalization of about $3.8 billion.
Boeing announced in March that it was in negotiations to accumulate the Wichita, Kansas-based company, weeks after an almost recent Boeing 737 Max 9 was launched on a Alaska Airlines flight, triggering a brand new crisis for Boeing. Spirit makes the fuselages for the 737 and other parts, including parts for Boeing's 787 Dreamliner.
In 2005, Boeing spun off operations in Kansas and Oklahoma that now form Spirit AeroSystems. Boeing generated about 70 percent of Spirit's revenue last yr, while a few quarter got here from manufacturing parts for Boeing's primary competitor, Airbus, in accordance with a securities filing.
CEO Dave Calhoun, who has announced his retirement at the tip of the yr, said on Monday that integrating Spirit into the corporate would “fully align” the 2 corporations' production systems and workforces.
“Among the many actions we take as a company, this is one of the most meaningful to demonstrate our relentless commitment to improving quality and ensuring Boeing is the company the world needs,” Dave Calhoun said in a message to employees.
He expects the transaction to shut in mid-2025, subject to approval by regulators and Spirit shareholders, in addition to the sale of Spirit's operators specializing in Airbus aircraft.
Spirit CEO Pat Shanahan is taken into account a possible successor to Calhoun.
Airbus announced on Monday that it had reached an agreement with Spirit. The European aircraft manufacturer will receive $559 million from Spirit to take over Airbus production lines. These include operations in Belfast, Northern Ireland, where the A220's wings and center fuselage are made, A220 pylons in Wichita, Kansas, and A350 fuselage parts in North Carolina.
Increasing pressure
A preliminary report from the National Transportation Safety Board on the January 5 accident said it appeared that the bolts holding the door stopper in place weren’t attached to the Max 9 when it left the Boeing factory and was Alaska Airlines Months before the accident.
This was probably the most serious of a series of producing problems on Boeing aircraft, including Spirit fuselages that had incorrectly drilled holes and improperly connected fuselage panels.
The crisis sparked by the blown door stop on the Alaska flight has slowed Boeing's deliveries of recent planes to airlines and caused financial losses for each Spirit and Boeing. Boeing's CFO said in May the corporate will burn money this yr quite than generate it – about $8 billion in the primary half of 2024. Boeing shares have fallen greater than 30% this yr.
One way Boeing is attempting to improve quality is by only accepting aircraft fuselages which are freed from defects, in order that repairs or additional manufacturing steps wouldn’t have to be carried out out of sequence and the chance of errors is reduced.
The Federal Aviation Administration (FAA) has stated that it is going to not allow Boeing to expand production until the corporate is satisfied with its production lines.
Calhoun was sharply criticized by lawmakers at a Senate hearing in June over the corporate's safety record, with some senators complaining that no improvements had been made following the 2 fatal Max crashes.
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