Exclusive-Boeing nearing deal with supplier Spirit Aero after months of talks, sources say By Reuters

Written by Mike Stone, Alison Lambert, and Tim Heffer

(Reuters) – Boeing Co (NYSE:) is close to reaching an agreement to buy back Spirit AeroSystems (NYSE:) after its former subsidiary made a breakthrough in separate talks with Airbus over the breakup of the troubled transatlantic supplier, people familiar with the matter said. On command. Thursday.

Boeing began talks earlier this year to buy back the Wichita, Kan.-based supplier it spun off in 2005, seeking to stabilize a key part of the supply chain for its best-selling planes after a new 737 MAX mid-air collision. In January. However, the talks have hit a stumbling block over Spirit working for Airbus, with the European Union threatening to block any deal that involves Boeing building parts for its latest models.

Boeing and Airbus have been widely successful in dividing Spirit's programs into business that Boeing will take back, along with business that will be taken over by the planemaker's European competitor, Airbus. There is also a third category of software that may be sold or handled separately, one of the sources said.

The exact timing of the deal is unclear, but sources said it could happen within days or weeks, barring last-minute snags.

All sources spoke on condition of anonymity due to the sensitivity of the talks.

Airbus, widely seen as the main obstacle to reaching a deal, is seeing “good progress” in talks with Spirit, a source familiar with the matter said. A second source said an agreement on Spirit's Airbus-linked assets was more likely than not before Airbus's mid-year earnings announcement in July.

Boeing declined to comment. Spirit spokesman Joe Buccino did not comment specifically on the talks, saying: “Our focus remains on providing high-quality products to our customers.”

In April, Airbus CEO Guillaume Faury told Reuters it was “not unlikely” that Airbus would take over Spirit's operations of the A350, its flagship long-haul jet whose mid-upper fuselage is manufactured in Kinston, North Carolina, and the smaller A220. Its wings are made at Spirit's factory in Belfast, Northern Ireland.

Two sources said Airbus and Boeing were working to overcome disruptions in inventory costs and contract values.

An Airbus spokesperson said the company is in discussions “with Spirit AeroSystems to protect our software resources and determine a more sustainable way forward, both operationally and financially, for the various Airbus work packages for which Spirit AeroSystems is responsible today.”