ARLINGTON, Va. – Boeing announced plans to acquire Spirit AeroSystems for $4.7 billion in an all-stock transaction for the manufacturing company, which was already part of the aerospace company’s manufacturing chain.
Boeing, located in Arlington, Virginia, announced the purchase in a statement Sunday night.
The equity value of the $4.7 billion acquisition is $37.25 per share, while the total value of the deal is about $8.3 billion, which includes Spirit’s latest reported net debt, it said. the aerospace company.
Boeing common shares will be exchanged for Spirit shares according to a variable formula that depends on a weighted average of the share price over a 15-day trading period ending on the second day before the close of the deal, Boeing said.
Spirit, located in Wichita, Kansas, manufactures critical parts for Boeing aircraft. Spirit also announced the acquisition on its website and social media.
“We believe this agreement is in the best interests of the flying public, our airline customers, Spirit and Boeing employees, our shareholders and the country more broadly,” said Boeing President and CEO Dave Calhoun, in the statement.
Boeing previously owned Spirit, and the aerospace company said bringing the supplier back into the Boeing group would improve the quality and safety of the planes, which are under increasing scrutiny from regulators, Congress and airlines.
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“By reintegrating Spirit, we can fully align our commercial production systems, including our safety and quality management systems, and our workforce with the same priorities, incentives and results – centered on safety and quality,” Calhoun said.
Buying Spirit would reverse Boeing’s long-standing strategy of outsourcing key work on its passenger planes. That approach was criticized because problems at Spirit halted production and delivery of popular Boeing jets, including the 737 and 787.
“Bringing Spirit and Boeing together will allow for greater integration of both companies’ manufacturing and engineering capabilities, including safety and quality systems,” said Patrick Shanahan, president and CEO of Spirit, in a statement.
Safety concerns came to a head following a Jan. 5 panel explosion on an Alaska 737 Max 9 at 16,000 feet (4,876 meters) over Oregon. The Federal Aviation Administration soon after announced increased oversight of Boeing and Spirit.
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The Justice Department said in a May court filing that Boeing violated the terms of a 2021 settlement that allowed the company to avoid prosecution for actions that led to two deadly crashes involving the company’s 737 Max jets more than five years ago.
The Justice Department is pushing Boeing to plead guilty to criminal fraud in connection with two deadly plane crashes involving its 737 Max jets, according to several people who heard federal prosecutors detail a proposed bid on Sunday.
Boeing has until the end of the week to accept or reject the offer, which includes the giant aerospace company agreeing to an independent monitor who would oversee compliance with anti-fraud laws, they said.
The companies also announced an agreement with Airbus to negotiate the purchase of Spirit assets involved in programs operated by the European aerospace company. The deal with Airbus is expected to begin when Boeing’s acquisition of Spirit is completed, the two U.S. companies said.
The FAA said in June it is investigating how titanium parts sold with falsified quality documentation were used in the construction of Boeing and Airbus passenger jets in recent years.
Boeing and Netherlands-based Airbus have said planes with falsely documented parts are safe to fly, but Boeing said it would remove the affected parts from planes that have not yet been shipped to airline customers.
This story originally appeared on Time.com read the full story
