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    Boeing Reacquires Spirit AeroSystems in Strategic $8.3 Billion Deal to Strengthen Manufacturing Capabilities

    nephilaBy Business And Money 4 Mins Read

    Yet another acquisition in the sector. This one though has the blessings of the powers that be in the government.

    Boeing Co. has confirmed its decision to reacquire Spirit AeroSystems Holdings Inc. through an all-stock transaction priced at $37.25 per share, placing the total value of Spirit at approximately $4.7 billion. This strategic move seeks to rectify manufacturing challenges and marks the end of a separation that began two decades ago.

    Including Spirit’s last reported net debt, the entire value of the deal is estimated at $8.3 billion. In a related development, Airbus SE will assume control of certain Spirit divisions that manufacture components for its planes, with a symbolic payment of $1 for these assets. Furthermore, Airbus will receive $559 million in compensation, as detailed in another announcement.

    Dave Calhoun, CEO of Boeing, emphasized the transaction’s broad benefits, highlighting its positive implications for passengers, airline clients, employees, shareholders, and the broader national interest. The acquisition reverses a 2005 decision when Boeing spun off these operations to reduce costs and decentralize assets. This reversal follows an incident on January 5, where a Spirit-assembled fuselage lost a door-shaped panel mid-flight, leading to significant operational and managerial upheavals at Boeing, including a series of federal probes.

    Boeing’s offer represents a 30% premium over Spirit’s stock price before merger discussions were publicly acknowledged. Additionally, Airbus plans to acquire facilities in North Carolina, France, Northern Ireland, and Morocco that are crucial to the production of A350 and A220 aircraft components.

    The deal, set to finalize in the middle of the next year, includes the acquisition of almost all Boeing-related commercial operations, along with various commercial, defense, and aftermarket activities.

    This agreement concludes after prolonged negotiations and occurs as Boeing prepares to settle a legal case with the U.S. Justice Department potentially involving a guilty plea to charges of criminal fraud linked to two fatal crashes of the 737 Max in 2018 and 2019.

    Governmental bodies, particularly U.S. aviation regulators and antitrust authorities, are likely to scrutinize the merger closely, given their concerns over manufacturing quality and the consolidation of the aerospace and defense sectors.

    Once finalized, the deal will consolidate formerly separated operations and expertise under one entity, enhancing synergy and operational efficiency. It also signals a leadership transition within Boeing, as Calhoun is expected to resign by year-end. Pat Shanahan, a former Boeing executive with extensive experience, particularly noted for his role in stabilizing the 787 Dreamliner program, is seen as a likely successor.

    The reintegration of Spirit into Boeing comes at a critical time, with the latter facing increased financial pressures, exacerbated by a slowdown in production and stringent quality inspections. These measures have significantly impacted Boeing’s financial health, with the company nearing speculative grade in its credit ratings.  Also throw in how Boeing whistleblowers seem to have to fear for their lives, now that many are dying under mysterious circumstances, and you have a mystery that will be unraveled one day.  After Trump is in office of course.  Trust in the company is at a low point for a reason. One word can sum up much: Woke.

    Major Points

    • Boeing Co. has announced its plan to reacquire Spirit AeroSystems for $4.7 billion in an all-stock transaction, valuing the entire deal at $8.3 billion including debt.
    • The deal will reintegrate operations that were separated in 2005 as Boeing initially spun off Spirit to cut costs.
    • Airbus SE is set to acquire specific Spirit facilities for $1, taking over parts manufacturing for its A350 and A220 aircraft, along with receiving $559 million in compensation.
    • The transaction, expected to close mid-next year, follows an incident involving a Spirit-assembled fuselage and is part of Boeing’s broader effort to address recent safety and manufacturing challenges.
    • This acquisition comes as Boeing navigates significant financial pressures and management transitions, potentially concluding with a settlement involving a plea of criminal fraud related to past 737 Max crashes.

    James Kravitz – Reprinted with permission of Whatfinger News

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