(WJET/WFXP) — Boeing announced Monday it has agreed to acquire supplier Spirit AreoSystems, a move the company says will improve plane safety and quality.
Boeing previously owned Spirit, and the purchase would reverse a longtime Boeing strategy of outsourcing key work on its passenger planes. That approach has been criticized as problems at Spirit disrupted production and delivery of popular Boeing jetliners including 737s and 787s.
“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,” Boeing President and CEO Dave Calhoun said in a statement late Sunday. “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.”
Spirit has been under intense pressure this year over its production of the 737 fuselage. A former Spirit employee, Joshua Dean, claimed that the company had allegedly failed “to conduct inspections resulting in faulty tail fin fittings being shipped to Boeing.”
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 U.S. Department of Defense and Spirit defense customers regarding defense and security missions.
Spirit’s Board of Directors unanimously approved the merger agreement.
The deal would value the supplier at $4.7 billion ($37.25 per share). However, this deal would still be subject to regulatory approvals. The total transaction value is approximately $8.3 billion, including Spirit’s last reported net debt.
The transaction is expected to close in mid-2025 and will be subject to the sale of the Spirit operations related to the Airbus commercial work as all as any additional regulatory approvals.
Spirit has also entered into an agreement with Airbus to allow the European plane maker to acquire certain assets serving the current Airbus program. For Airbus, Spirit currently produces the A350 fuselage, A220’s wings and mid-fuselage, and A220 pylons. As part of the deal, Spirit will pay Airbus $559 million.
In addition, Spirit is proposing to sell certain of its operations, including those in Belfast, Northern Ireland (non-Airbus operations), Prestwick, Scotland, and Subang, Malaysia.
Boeing spun off Spirit, which is based in Wichita, Kansas, and not related to Spirit Airlines, in 2005. In recent years, quality problems have mounted, including fuselage panels that didn’t fit together precisely enough and holes that were improperly drilled.
Spirit removed its CEO in October and replaced him with Patrick Shanahan, a former Boeing executive who served as acting defense secretary in the Trump administration.
“After carefully evaluating Boeing’s offer to combine, we are confident this transaction is in the best interest of Spirit and its shareholders, and will benefit Spirit’s other stakeholders,” Shanahan said in a statement. “Bringing Spirit and Boeing together will enable greater integration of both companies’ manufacturing and engineering capabilities, including safety and quality systems.”
The merger comes as the U.S. Justice Department is pushing Boeing to plead guilty to criminal fraud in connection with two deadly plane crashes involving its 737 Max jetliners, according to several people who heard federal prosecutors detail a proposed offer Sunday. This plea deal would allow Boeing to avoid a trial over the alleged conspiracy to defraud the United States. Boeing has until July 7 to either accept or reject the plea deal.
Under the proposed deal, the company must also agree to the appointment of an external corporate monitor, pay a fine of about $200 million and remain on probation for 3 years, according to the lawyers for the families.
The Associated Press contributed to this story.