(Bloomberg) — Boeing Co. on Sunday agreed to acquire Spirit AeroSystems Holdings Inc. for $37.25 per share in an all-stock deal that values the company at $4.7 billion, according to people with knowledge of the transaction.
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The U.S. planemaker also plans to assume about $3.5 billion of Spirit’s debt as part of the deal, which could be announced as early as Monday, said the people, who asked not to be identified until the transaction is made public. Reuters reported the share price earlier Sunday. Representatives for the companies declined to comment.
Boeing plans to take control of the Spirit production that supports its commercial jetliners, including building frames for its cash cow 737 Max, two of the people said. It will also gain control of some of Spirit’s defense contracting work, they said.
Boeing archrival Airbus SE is also expected to announce it will take control of a number of Spirit factories that produce structures and components for its commercial aircraft. Terms of that transaction were not immediately available.
Boeing wants to reintegrate Spirit after a January accident aboard a 737 Max-9 aircraft exposed quality and production deficiencies at both Boeing and its main supplier. This led to a reconsideration of their relationship.
Spirit, along with Boeing, has faced mounting financial pressure and criticism after the door-shaped panel on a 737 Max 9 model blew out minutes after takeoff. Shipments of 737 fuselages have plummeted as Boeing has stepped up inspections in Kansas and at home near Seattle and has refused to accept aircraft assemblies with missing parts or incomplete work.
For Boeing, the deal brings back in-house a key supplier for the 737, 787 Dreamliner and other commercial aircraft at a time when the company is feeling the financial strain of delayed production. Boeing lost about $4 billion in cash in the first quarter and is expected to lose a similar amount in the current three months of the year. The company’s credit rating is hovering one level above speculative levels, and management is keen to avoid falling into junk territory.
The Wichita campus that builds most of the 737 aircraft fuselage for Boeing, along with the nose parts of the 787 Dreamliners, was at the center of several failures as it struggled with post-Covid workforce turnover. Reintegrating Spirit wants to help Boeing stabilize its supply chain and gain more control over its aircraft production.
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