Boeing has reportedly made an offer to acquire Spirit AeroSystems in a deal that values the supplier at around $35 per share. This offer, which includes a significant premium over Spirit’s stock closing price, represents a strategic move by Boeing to stabilize its supply chain following a mid-air incident involving the 737 MAX. Initially, Boeing had considered an all-cash deal but ultimately revised the terms to include a combination of cash and stock.
The acquisition talks between Boeing and Spirit hit a stumbling block due to Spirit’s existing work for Airbus. The European aerospace group threatened to block any deal that involved Boeing producing parts for its newest models. As a result, the deal will require Spirit to offload some of its manufacturing plants to Airbus, creating a complex situation for all parties involved.
Spirit, which posted a significant net loss and cash burn in the first quarter, is facing financial challenges that have been exacerbated by the COVID-19 pandemic. The acquisition by Boeing could provide the necessary capital infusion and stability to help Spirit weather these financial headwinds and continue providing quality products to its customers.
Boeing’s decision to buy back Spirit is driven by the need to ensure safety and quality in its manufacturing processes. The aerospace giant has cited issues with incomplete or faulty parts from Spirit, leading to concerns about the overall integrity of its supply chain. By bringing Spirit back under its umbrella, Boeing aims to address these quality control issues and improve the reliability of its production facilities.
Boeing’s offer to acquire Spirit AeroSystems represents a significant strategic move aimed at stabilizing its supply chain and improving the quality of its manufacturing processes. While the deal faces challenges related to Spirit’s work for Airbus and its financial performance, it has the potential to create a stronger, more resilient partnership between Boeing and its key supplier. The final terms of the acquisition offer will be crucial in determining the future direction of both companies and the broader aerospace industry as a whole.