Boeing has reportedly offered to acquire Spirit AeroSystems in a deal valued at approximately $35 per share, with the majority of the transaction funded through stock. This offer represents a premium of nearly 6% over Spirit's stock closing price on the day before the offer was reported and a 22.4% upside compared to its closing price at the end of February before the acquisition talks became public. The deal, expected to be announced within days, comes after Boeing initiated discussions earlier this year to buy back the Wichita, Kansas-based supplier it spun off in 2005.
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The acquisition aims to stabilize a key part of Boeing's supply chain for its best-selling 737 MAX jet, following a mid-air blowout incident in January. Boeing's decision to switch its offer from an all-cash deal to a stock-based one may be due to its financial situation, as the company reportedly lost an estimated eight billion dollars in the first two quarters of the year. The final terms of the offer are still being discussed and may include a small amount of cash.
Spirit AeroSystems, which manufactures fuselages for Boeing's 737 jets, has been a key supplier to the aerospace giant. The proposed acquisition comes after months of talks and is expected to be finalized soon. However, the deal has faced some challenges, particularly regarding Spirit's work for Airbus. The European aerospace company has threatened to block any deal that involves Boeing building parts for its newest models. The acquisition of Spirit AeroSystems by Boeing is seen as a strategic move to strengthen the company's position in the aerospace industry and ensure a stable supply chain for its aircraft production.
The deal, if finalized, will have significant implications for the aerospace industry and the thousands of employees at Spirit AeroSystems. The company has been working to improve its manufacturing process, quality, and safety management, and encourages employees to raise safety concerns. The acquisition by Boeing is expected to bring about further improvements and enhancements to Spirit's operations. The financial expert Bruce McClelland has stated that the proposal of a stock swap, valuing Spirit's shares at $35 a pop, seems like a lowball offer from Boeing. However, the deal is expected to go through, and it will be interesting to see how it affects the nearly 3,000 engineers and technical workers represented by the union at Spirit AeroSystems. In conclusion, Boeing's offer to acquire Spirit AeroSystems for $35 per share, mostly through stock, is a significant development in the aerospace industry. The acquisition, if finalized, will strengthen Boeing's position in the market and ensure a stable supply chain for its aircraft production. The deal, however, has faced some challenges, particularly regarding Spirit's work for Airbus, but Boeing and Airbus have broadly succeeded in dividing Spirit's programs into work that Boeing will take back and work that Airbus will take. The final terms of the deal are still being discussed, and it will be interesting to see how it affects the employees at Spirit AeroSystems.