Boeing announced plans to acquire Spirit AeroSystems for $4.7 billion in an all-stock transaction. Spirit is part of the aerospace giant's supply chain.
Boeing, based in Arlington, Virginia, announced the purchase in a statement early Monday. Spirit is headquartered in Wichita, Kansas.
At about the same time, European aerospace giant Airbus said it had entered into an agreement to buy “key activities related to Airbus” from Spirit.
Under the intentions outlined in the announcements, Boeing would acquire most of Spirit's operations.
Spirit builds fuselages and other key components for both Boeing and Airbus.
The agreement with Airbus will take effect once Boeing's acquisition of Spirit is completed, the two American companies said.
The equity value of Boeing's acquisition is $4.7 billion and $37.25 per share, while the total value of the deal is about $8.3 billion, including Spirit's last reported net debt, Boeing said.
Airbus said it would be “compensated by a payment of $559 million” from Spirit “for a nominal amount of $1.00, subject to adjustment, including based on the final transaction perimeter.”
Boeing on why it is making this move
Boeing President and CEO Dave Calhoun said in the company statement: “We believe this deal is in the best interests of the flying public, our airline customers, Spirit and Boeing employees, our shareholders and the broader country.”
Boeing previously owned Spirit, and Boeing said bringing the supplier back into the Boeing group would improve aircraft quality and safety increasing scrutiny by regulators, Congress and airlines.
“By reintegrating Spirit, we can fully align our commercial manufacturing systems, including our safety and quality management systems, and our workforce with the same priorities, incentives and results – focused on safety and quality,” said Calhoun.
The purchase of Spirit would reverse Boeing's years-long strategy of outsourcing critical work on passenger planes, an approach that has been criticized as problems at Spirit disrupted production and delivery of popular Boeing jetliners, including the 737s and 787s.
Security concerns came to a head after January 5 panel blowout on an Alaska 737 Max 9 at 16,000 feet over Oregon. The Federal Aviation Administration soon after announced tighter oversight of Boeing and Spirit.
A settlement for Boeing?
Separately, the Justice Department on Sunday Boeing presented with a settlement proposal after it accused Boeing of violating the terms of a 2021 deferred prosecution order that was entered after two 737 Max crashes in 2018 and 2019.
The department told Boeing it could plead guilty or go to trial, people familiar with the conversations confirmed to CBS News. The deal would see the company plead guilty to the conspiracy charge it originally faced in 2021. In return, Boeing would pay a fine and enter a three-year probationary period, the people said.
The DOJ outlined the deal earlier Sunday in a presentation to family members of victims of the 737 Max crash before presenting it to Boeing.
News of the settlement was first reported by Reuters.
If Boeing agrees, a judge must approve the deal.
But Paul Cassell, an attorney representing the families of 15 victims, told CBS News that the proposal was “another settlement” and that the families would “strongly object” to the deal.
Titanium parts a concern
In another safety area, the FAA said in June that it investigation into how titanium parts sold with falsified quality documentation were used in the construction of Boeing and Airbus passenger aircraft in recent years.
Boeing and Airbus have said the planes with the falsely documented parts are safe to fly, but Boeing has said it will remove the affected parts from planes that have not yet been shipped to the airlines.
