Boeing agrees to buy supplier Spirit Aerosystems for $4.7 billion

By Mike Murphy and Barbara Kollmeyer

Boeing Co. has agreed to buy parts supplier Spirit Aerosystems Holdings Inc. in an all-stock deal worth more than $4 billion.

Spirit (SPR) announced on Monday that Boeing (BA) has agreed to pay $37.25 a share, valuing Spirit at $4.7 billion. Spirit shares closed Friday at $32.87 a share, for a market cap of $3.83 billion. Spirit said the enterprise value of the deal values it at $8.3 billion, which includes the company's last reported net debt.

The deal price also represents a 30% premium to $28.60 on Feb. 29, the day before both companies confirmed deal talks were underway. Reuters had reported on Sunday that a deal was pending. Shares of Spirit climbed 6% in premarket trading, while Boeing shares slipped 1.1%

"After carefully evaluating Boeing's offer to combine, we are confident this transaction is in the best interest of Spirit and its shareholders, and will benefit Spirit's other stakeholders," said Patrick M. Shanahan, president and chief executive officer of Spirit.

"Bringing Spirit and Boeing together will enable greater integration of both companies' manufacturing and engineering capabilities, including safety and quality systems," said Shanahan.

Boeing rival Airbus (FR:AIR) also announced it had entered into an agreement with Spirit to be compensated $559 million, to acquire some of its manufacturing activities, including production of A350 fuselage sections in Kinston, North Carolina, and St. Nazaire, France; of the A220's wings and mid-fuselage in Belfast, Northern Ireland, and Casablanca, Morocco; as well as of the A220 pylons in Wichita, Kansas. Airbus shares rose 1.8% in European trading.

Spirit was once part of Boeing before it was spun off in 2005. Media reports had also indicated Boeing would buy the portion of Spirit's business that supplies its parts.

Spirit has been in buyout talks with Boeing, its largest customer, for months. Boeing reportedly revised its offer from all cash to all stock in late June. In May, Spirit announced hundreds of layoffs due to a production slowdown of Boeing's troubled 737 Max jetliners.

Spirit shares are up about 3% year to date, while Boeing shares are down 30% in 2024. Airbus shares are down 8% year to date.

-Mike Murphy -Barbara Kollmeyer

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07-01-24 0548ET

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