Boeing to Acquire Spirit AeroSystems
Boeing [NYSE: BA] announced a definitive agreement to acquire Spirit AeroSystems [NYSE: SPR] in an all-stock transaction valued at $4.7 billion, with a total transaction value of $8.3 billion, including Spirit's net debt. Spirit shareholders will receive Boeing shares based on an exchange ratio related to Boeing's share price. This acquisition aims to enhance Boeing's commercial production, safety, and quality management systems, ensuring continuity for key U.S. defense programs and providing long-term value to stakeholders. The deal also involves the sale of certain Spirit operations to Airbus and is expected to close by mid-2025, subject to regulatory approvals and other conditions.
- Boeing's acquisition of Spirit AeroSystems enhances safety and quality management systems.
- The $4.7 billion all-stock transaction aligns Boeing's commercial production systems.
- Ensures continuity for key U.S. defense programs.
- Expected to provide long-term value to commercial and defense customers, employees, and shareholders.
- The transaction is subject to regulatory and Spirit shareholder approvals.
- Integration challenges may arise due to the complexity of the deal.
- Potential financial strain involving Spirit's net debt, totaling around $8.3 billion.
- Dependency on the sale of certain Spirit operations to Airbus for the deal's completion.
Insights
A $8.3 billion all-stock transaction where Boeing acquires Spirit AeroSystems reflects a considerable strategic move. By integrating Spirit, Boeing aims to align and streamline its commercial and defense operations. The acquisition would likely leverage Boeing's existing engineering and manufacturing capabilities to improve operational efficiencies. From a financial perspective, the deal is structured with a share exchange ratio, which provides Spirit shareholders substantial upside, especially if Boeing's share price trends positively. For investors, this transaction means potential long-term value as Boeing aims to consolidate its supply chain and improve its product offerings. However, investors should be aware of potential risks such as regulatory approval challenges and the integration process of Spirit's operations into Boeing's framework, which could incur unforeseen costs. The deal also includes the assumption of Spirit's net debt, which needs to be carefully evaluated for impacts on Boeing's balance sheet in the long term.
The acquisition of Spirit AeroSystems is a significant move for Boeing in the aerospace sector. Spirit AeroSystems has been a important supplier to Boeing, providing key components for their commercial aircraft. This deal could mean more integrated and coordinated production processes, potentially reducing delays and improving quality control. Furthermore, the deal is likely to stabilize the supply chain, which has been a critical issue for the aviation industry, especially post-pandemic. Additionally, the divestiture of Spirit's Airbus-related operations indicates a strategic commitment to focus solely on Boeing's commercial and defense products. Such a move might also alleviate competitive pressures and streamline operations. However, the success of this acquisition will depend heavily on how seamlessly Spirit's operations can be merged with Boeing's. Any disruption could impact production timelines and costs.
Boeing's assurance to maintain continuity for key U.S. defense and national security programs underlines the importance of this acquisition not just commercially, but also strategically for national interests. Spirit AeroSystems is involved in various defense projects and its integration into Boeing ensures that these critical projects remain uninterrupted. This move also signifies Boeing's commitment to supporting defense operations, potentially strengthening its relationship with the U.S. Department of Defense. For stakeholders, this indicates a stable future for defense contracts which are generally lucrative and offer long-term revenue streams. However, the success of these integrations and operational continuity will depend on effective collaboration with defense clients and regulatory bodies to ensure compliance and smooth transitions.
- Demonstrates commitment to aviation safety, improves quality for Boeing Commercial Airplanes
- Leverages Boeing enterprise engineering and manufacturing capabilities
- Maintains continuity for key
- Supports supply chain stability and critical manufacturing workforce
- Provides long-term value for commercial and defense customers, employees and shareholders
Each share of Spirit common stock will be exchanged for a number of shares of Boeing common stock equal to an exchange ratio between 0.18 and 0.25, calculated as
"We believe this deal is in the best interest of the flying public, our airline customers, the employees of Spirit and Boeing, our shareholders and the country more broadly," said Boeing President and CEO Dave Calhoun. "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."
Boeing's acquisition of Spirit will include substantially all Boeing-related commercial operations, as well as additional commercial, defense and aftermarket operations. As part of the transaction, Boeing will work with Spirit to ensure the continuity of operations supporting Spirit's customers and programs it acquires, including working with the
"We are proud of the role Boeing plays in supporting our men and women in uniform and are committed to ensuring continuity for Spirit's defense programs," said Calhoun.
Airbus SE and Spirit have also entered into a binding term sheet under which Airbus will acquire, assuming the parties entered into definitive agreements and receipt of any required regulatory approvals, certain commercial work packages that Spirit performs for Airbus concurrently with the closing of the Boeing-Spirit merger. In addition, Spirit is proposing to sell certain of its operations, including those in
PJT Partners is acting as lead financial advisor to Boeing, with Goldman Sachs & Co, LLC and Consello acting as additional advisors. Sullivan & Cromwell LLP is acting as outside counsel to Boeing.
Additional information is available on the Events and Presentations section of www.boeing.com/investors.
About Boeing
As a leading global aerospace company, Boeing develops, manufactures and services commercial airplanes, defense products and space systems for customers in more than 150 countries. As a top
Cautionary Statement Regarding Forward-Looking Statements
This press release contains "forward-looking statements" within the meaning of Section 27A of the Securities Act, Section 21E of the Exchange Act, and the Private Securities Litigation Reform Act of 1995, each as amended. Words such as "expects," "believes," "may," "should," "will," "intends," "projects," "plans," "estimates," "targets," "anticipates," and other similar words or expressions, or the negative thereof, generally can be used to help identify these forward-looking statements. Examples of forward-looking statements include statements relating to the anticipated benefits and synergies of the acquisition, the timetable for completing the acquisition, and the impact of the acquisition on our business and future financial condition and operating results, as well as any other statement that does not directly relate to any historical or current fact. Forward-looking statements are based on expectations and assumptions that we believe to be reasonable when made, but that may not prove to be accurate. These statements are not guarantees and are subject to risks, uncertainties, and changes in circumstances that are difficult to predict. Many factors could cause actual results to differ materially and adversely from these forward-looking statements. Among these factors are risks related to: the timely satisfaction of the conditions to the consummation of the proposed transaction, including approval of the Spirit stockholders; realizing the anticipated benefits of the acquisition (including anticipated synergies and quality improvements) in the expected timeframe or at all; the successful integration of Spirit into our business and operations; the occurrence of any event, change, or other circumstance that could give rise to the right of one or both of the parties to terminate the merger agreement; the ability of Spirit to enter into definitive agreements with Airbus SE, and consummate the related transactions, for the disposition of Spirit operations related to certain Airbus commercial work packages; reputational risk and potential adverse reactions of our or Spirit's customers, regulators, employees or business partners, including those resulting from the announcement or completion of the proposed transaction; the possibility that the proposed transaction may be more expensive to complete than anticipated, including as a result of unexpected factors or events; the diversion of management's attention and time from ongoing business operations and opportunities on acquisition-related matters; legal, regulatory, tax and economic developments affecting Boeing, Spirit and our respective businesses; the ability of Boeing and Spirit to obtain the necessary regulatory approvals or to satisfy any of the other conditions to the proposed combination in a timely manner or at all; general conditions in the economy and our industry, including those due to regulatory changes; our reliance on our commercial airline customers; the overall health of our aircraft production system, production quality issues, commercial airplane production rates, our ability to successfully develop and certify new aircraft or new derivative aircraft, and the ability of our aircraft to meet stringent performance and reliability standards; changing budget and appropriation levels and acquisition priorities of the
Additional information concerning these and other factors can be found in our and Spirit's filings with the SEC, including our and Spirit's most recent Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K. Any forward-looking statement speaks only as of the date on which it is made, and we assume no obligation to update or revise any forward-looking statement, whether as a result of new information, future events, or otherwise, except as required by law.
Additional Information and Where to Find It
Boeing will file with the
No Offer or Solicitation
This press release is not intended to and shall not constitute an offer to sell or the solicitation of an offer to buy any securities, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to appropriate registration or qualification under the securities laws of such jurisdiction. No offering of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act of 1933, as amended.
Participants in the Solicitation
Boeing and certain of its directors, executive officers and other employees, and Spirit and its directors and certain of Spirit's, executive officers and other employees, may be deemed to be participants in the solicitation of proxies from Spirit's stockholders in connection with the proposed transaction. A description of participants' direct or indirect interests, by security holdings or otherwise, will be included in the proxy statement/prospectus relating to the proposed transaction when it is filed with the SEC. Information regarding Boeing's directors and executive officers is contained in the "Proxy Summary – Leadership Changes," "Election of Directors (Item 1)," "Corporate Governance," "Compensation Discussion and Analysis," "Compensation of Executive Officers" and "Stock Ownership Information" sections of the definitive proxy statement for Boeing's 2024 annual meeting of shareholders, filed with the SEC on April 5, 2024, in Item 10 of Boeing's Annual Report on Form 10-K for the fiscal year ended December 31, 2023, filed with the SEC on January 31, 2024, in Boeing's Current Reports on Form 8-K filed with the SEC on December 11, 2023, March 25, 2024, and May 17, 2024, and in Boeing's February 22, 2024 press release, available on Boeing's investor relations website at www.boeing.com/investors, relating to the appointment of a new Chief Human Resources Officer. Information regarding Spirit's directors and executive officers is contained in the "Proposal 1 – Election of Directors," "Corporate Governance," "Director Compensation," "Stock Ownership" and "Compensation Discussion and Analysis" sections of Spirit's definitive proxy statement for its 2024 annual meeting of stockholders, filed with the SEC on March 12, 2024, under the heading "Executive Officers of the Registrant" in Part I of Spirit's Annual Report on Form 10-K for the fiscal year ended December 31, 2023, filed with the SEC on February 22, 2024, in Item 5.07 of Spirit's Current Report on Form 8-K filed with the SEC on April 29, 2024, and in Spirit's Current Report on Form 8-K filed with the SEC on June 5, 2024. Additional information regarding ownership of Boeing's securities by its directors and executive officers and of Spirit's securities by its directors and executive officers is included in such persons' SEC filings on Forms 3 and 4. These documents and the other SEC filings described in this paragraph may be obtained free of charge as described above under the heading "Additional Information and Where to Find It."
Contact
Boeing Media Relations
media@boeing.com
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SOURCE Boeing
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