Boeing agreed on Sunday to buy Spirit AeroSystems Holdings Inc. for $37.25 a share in an all-stock deal that values the company at $4.7 billion, according to people familiar with the deal.
The U.S. planemaker also plans to assume about $3.5 billion of Spirit’s debt as part of the deal, which could be announced as soon as Monday, said the people, who asked to remain anonymous before the deal was announced. Reuters reported the stock price earlier on Sunday. Representatives of the companies declined to comment.
Boeing plans to take control of manufacturing of Spirit’s jets that underpin its commercial jet lineup, including building frames for the cash cow 737 Max, two of the people said. It would also take control of part of Spirit’s defense contracting business, they said.
Boeing’s archrival Airbus SE is also expected to announce it is taking control of some of Spirit’s factories that make structures and components for its commercial aircraft. Terms of the transaction weren’t immediately available.
Boeing is seeking to reintegrate Spirit after a January accident involving a 737 Max 9 jet exposed quality and manufacturing flaws at both Boeing and its key suppliers and led to a rethink of their relationship.
Spirit has faced increasing pressure and financial scrutiny alongside Boeing after a door-shaped panel on a 737 Max 9 exploded minutes after takeoff. Shipments of 737 planes declined as Boeing ramped up inspections in Kansas and back home near Seattle, and refused to accept airframes with missing components or incomplete work.
For Boeing, the deal brings back a key supplier of the 737, 787 Dreamliner and other commercial jets to the company at a time when the company is feeling the financial strain of slowing production. Boeing burned through about $4 billion in cash in the first quarter and is set to burn a similar amount in the current three months of the year. The company’s credit rating is one level above speculative grade, and management is keen to avoid slipping into junk territory.
The Wichita campus, which builds most of Boeing’s 737 airframe along with the nose sections on its 787 Dreamliner planes, has been at the center of several defects as it grapples with post-Covid workforce turnover. Reintegrating Spirit aims to help Boeing stabilize its supply chain and gain greater control over the production of its aircraft.