Boeing makes a groundbreaking move with Spirit AeroSystems acquisition – experts suggest it’s a game changer

Seattle, Washington – Boeing announced on Monday its acquisition of Spirit Aero for $37.25 a share in stock, valuing the company at an equity value of about $4.7 billion and a total of $8.3 billion including its debt. In response, Spirit Aero saw a 3.7% increase in its stock price to $34.07, while Boeing’s stock rose by 2.4% to $186.46 a share. This acquisition signals a strategic move by Boeing to fully align its commercial production systems with Spirit Aero, including safety and quality management systems, and workforce priorities and incentives, as stated by Boeing CEO Dave Calhoun.

The deal between Boeing and Spirit Aero involves Boeing rival Airbus, who will buy back some business from Spirit and receive $559 million from the company. This transaction includes both cash and business assets, which could potentially lower operating costs for Airbus. Despite this acquisition, investors are advised to consider Spirit’s prior earnings as the company is not expected to generate positive Ebitda in 2024. However, Ebitda is projected to recover to 2019 levels by 2026.

Analysts view the acquisition as beneficial for Spirit and Airbus, but potentially less advantageous for Boeing. Despite potential short-term impacts on Boeing’s earnings per share in 2024 and 2025, the acquisition of Spirit will aid in increasing production of the 737 MAX. The deal marks the end of Spirit Aero’s decades-long independence, as it reverts to being a part of Boeing following its sale to a private-equity firm in 2005 and subsequent public offering in 2006.

Investors are closely monitoring the stock movements of both Boeing and Spirit Aero following the acquisition announcement, with expectations for a gradual alignment of stock prices and exchange ratios in the coming months. Ultimately, the deal is seen as a strategic move that could lead to cost savings and operational efficiencies for all parties involved.