Boeing has confirmed it will take over US-based aerostructures firm Spirit AeroSystems in an $8.3 billion agreement, including net debt, with Airbus poised to acquire its key programmes from the company.
The all-stock transaction has an equity value of $4.7 billion, with each share of Spirit stock being exchanged for a number of Boeing shares – the exchange ratio is 0.18-0.25 depending on average Boeing share prices.
Boeing had previously signalled that it would acquire Spirit – originally established when Boeing divested its Wichita operations – after Spirit became the subject of scrutiny over quality control, while also facing heavy losses.
“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 – centered on safety and quality,” says Boeing chief Dave Calhoun.
Boeing’s acquisition of Spirit will essentially cover all Boeing-related commercial activities, plus a number of commercial, defence and aftermarket operations.
Spirit also carries out substantial work for Airbus, and the European airframer – which has been holding cost talks with Spirit – has found itself having to negotiate the separation of its own interests.
Airbus has entered a binding agreement relating to the potential acquisition of Spirit’s A350 fuselage production, which takes place at Kinston in North Carolina and the French city of St Nazaire.
It will also take over the A220 wing and central fuselage production activities conducted at Belfast and Casablanca, and pick up the pylon work from Wichita.
Airbus says Spirit will compensate the company with a payment of $559 million, for a nominal $1 consideration.
Finalisation of the Airbus deal remains subject to due diligence and the figures could be adjusted.
“With this agreement, Airbus aims to ensure stability of supply for its commercial aircraft programmes through a more sustainable way forward, both operationally and financially, for the various Airbus work packages that Spirit AeroSystems is responsible for today,” says Airbus.
It says there is “no guarantee” of a transaction being concluded, but all parties are “willing and interested to work in good faith to progress and complete this process”.
Spirit is proposing to sell other parts of its operation, including activities in Prestwick, Scotland – which support Airbus programmes – as well as the non-Airbus work in Belfast and interests in Malaysia.
Boeing says its acquisition is expected to close in the middle of next year, subject to conditions. An Airbus transaction would be carried out concurrently with the closing.
Spirit chief Patrick Shanahan says he is “confident” that the transaction is “in the best interest of Spirit and its shareholders”.
“Bringing Spirit and Boeing together will enable greater integration of both companies’ manufacturing and engineering capabilities, including safety and quality systems,” he states.
Shanahan adds that putting its Airbus programmes under Airbus ownership will allow “greater integration and alignment”.
