(New York) Twenty years after separating from it, Boeing will buy its subcontractor Spirit AeroSystems, weighed down by production problems, but part of the activities must be taken over by Airbus, the two major competitors of the company announced on Monday. world aeronautics.
On Boeing’s side, the transaction will be made entirely in shares, at a price of $37.25 per share, valuing Spirit AeroSystems at $4.7 billion or $8.3 billion including debt, the American manufacturer explained in a press release.
It is by far Spirit’s largest customer, with 60% of its revenue coming from the aircraft manufacturer in 2022, including fuselages.
But the equipment manufacturer is also a strategic supplier to Airbus, for which it notably produces wing elements.
The European aircraft manufacturer said in a separate statement that it had “entered into a binding agreement with Spirit AeroSystems for the potential acquisition of major Airbus-related businesses.”
The transaction is to be made for a symbolic dollar, and Airbus will even receive compensation of 559 million dollars, according to the initial terms of the agreement, which are subject to change and the approval of the authorities.
But Airbus will have to make additional investments to support the ramp-up of production of the activities it must recover.
This is a crucial subject for the European manufacturer, which revised downwards its annual targets for deliveries of commercial devices last week.
Completion is expected by mid-2025, subject to the necessary authorizations.
According to Boeing’s press release, the European aircraft manufacturer must buy operations in Prestwick (Scotland), Subang (Malaysia) and Belfast (Northern Ireland), some of which are not directly linked to it.
For its part, the American group will recover activities located mainly in Wichita (Kansas), Tulsa (Oklahoma) and Dallas (Texas), which should generate around one billion dollars in annual turnover.
“We believe this agreement is in the best interests of travelers, our customers, Spirit and Boeing employees, our shareholders and our country more generally,” said Boeing CEO Dave Calhoun, quoted in his company’s press release.
Boeing and Spirit AeroSystems confirmed preliminary discussions in early March with a view to this remarriage.
Launched into an outsourcing policy to retain only the final assembly of aircraft, Boeing created Spirit AeroSystems in 2005 by selling off its Wichita (Kansas) plant, which specialized in aerostructures.
The new independent company has since diversified its clientele and grown through acquisitions.
But the two companies have been under close surveillance since an in-flight incident on January 5 on an Alaska Airlines Boeing 737 MAX 9.
“Supply stability”
The US Federal Aviation Administration (FAA) reported on March 4 the identification of “nonconformities in the manufacturing control process, handling and storage of spare parts, and production control” at Boeing and Spirit.
Three of the four families of commercial airplanes currently manufactured by Boeing are under FAA investigation for quality problems: the 737, 777 and 787 Dreamliner.
The European aircraft manufacturer specified that its part of the transaction would concern “major activities linked to Airbus”.
In particular the production of A350 fuselage sections in Kinston (North Carolina) and Saint-Nazaire (France), A220 wings and central fuselage in Belfast and Casablanca (Morocco), as well as A220 pylons in Wichita.
“With this agreement, Airbus intends to ensure the stability of supply for its commercial aircraft programs,” noted the group.
For Third Bridge analyst Peter McNally, “the industrial logic of supply chain integration is sound, but the reality could prove more difficult due to Boeing’s challenges in its own manufacturing process.”
Boeing’s succession of production quality problems led it to announce plans to reintegrate Spirit in early March. For Airbus, it was unthinkable that its main competitor would become one of its strategic suppliers.
“We do not want large work packages to be provided by our main and only competitor,” stressed Guillaume Faury, Airbus’ executive chairman, at the end of April, saying he was monitoring the situation “closely”.
As of 11:40 a.m. ET, Boeing shares were up 2.24 percent and Spirit AeroSystems shares were up 2.95 percent on the New York Stock Exchange. Airbus shares were up 2.74 percent on the Paris Stock Exchange.