Boeing Co. [NYSE: BA], the world's largest aerospace company, entered into a definitive agreement on July 1, 2024 to acquire Spirit AeroSystems [NYSE: SPR], a leading independent supplier of aerospace components, in a deal valued at $8.3 billion including debt, after months of talks between the U.S. planemaker and its supplier. This strategic acquisition is expected to enhance Boeing's manufacturing capabilities, streamline its supply chain, and drive long-term growth and innovation in the aerospace industry.
Deal Structure:
Under the terms of the deal, each share of Spirit common stock will be exchanged for a number of shares of Boeing common stock equal to an exchange ratio between 0.18 and 0.25, calculated as $37.25 divided by the volume weighted average share price of Boeing shares over the 15-trading-day period. Spirit shareholders will receive 0.25 Boeing shares for each of their Spirit shares if the volume-weighted average price is at or below $149.00, and 0.18 Boeing shares for each of their Spirit shares if the volume-weighted average price is at or above $206.94.
The equity price of $37.25 per share, represents a premium of 13.33% from the stock’s last close on June 28, 2024.
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Company Profile:
Spirit AeroSystems-
Spirit AeroSystems, headquartered in Wichita, Kansas, is a leading manufacturer of aerostructures for commercial, defense, and business jets, specializing in fuselages, wings, pylons, and nacelles, with facilities in the U.S., U.K., France, Malaysia, and Morocco.
Tom Gentile, President and CEO of Spirit AeroSystems, commented on the acquisition: "We are excited about the opportunities that this combination will bring. Joining forces with Boeing will provide us with greater resources and capabilities to continue our tradition of excellence in aerospace manufacturing. Together, we will be better positioned to meet the evolving needs of our customers and deliver exceptional value to our stakeholders."
Boeing-
Boeing, a leading global aerospace company and top U.S. exporter, develops and services commercial airplanes, defense products, and space systems in over 150 countries, focusing on innovation, sustainability
"We are thrilled to welcome Spirit AeroSystems into the Boeing family," said David Calhoun, President and CEO of Boeing. "This acquisition represents a significant step forward in our strategy to strengthen our production capabilities and ensure a resilient and efficient supply chain. Spirit AeroSystems' expertise and innovation in the aerospace sector will complement our own capabilities and accelerate our progress in delivering the highest quality products to our customers."
Airbus Term Sheet:
Separately, Boeing’s rival Airbus SE also entered a term sheet with Spirit wherein the European planemaker will be compensated by payment of $559 million from Spirit AeroSystems, depending on the final outlines of the deal, while it would pay Spirit a symbolic $1 for the assets. Airbus is also a customer of Spirit like Boeing.
Under this deal, Airbus will take over core activities at Spirit’s plants in the United States, Northern Ireland, France, and Morocco, as well as some activities in Wichita, Kansas.
The deal with Airbus was prompted by Boeing’s decision to repurchase its former subsidiary, which had been supplying Airbus and others since it separated from Boeing nearly two decades ago.
Other Deal Details:
Spirit also plans to divest operations in Malaysia, Scotland which support Airbus programs, and Northern Ireland excluding Airbus-related activities.
Spirit Aersystems’s current EV/Sales (TTM) ratio is 1.21, below the sector median of 1.83.
The deal with Boeing is expected to close in mid-2025.
Deal Metrics:
For more details regarding this M&A transaction, please visit the Deal Metrics page here: @ https://www.insidearbitrage.com/deal-metrics/SPR/2999/spirit-aerosystems-holdings-inc-to-be-acquired-by-boeing-co/
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Disclaimer: This press release includes forward-looking statements within the meaning of applicable securities laws. Forward-looking statements can generally be identified by the use of words such as "anticipate," "believe," "estimate," "expect," "intend," "may," "plan," "predict," "project," "should," "will," or similar expressions. These statements are based on the current expectations and beliefs of Boeing Co. (BA) and Spirit AeroSystems management and are subject to a number of risks, uncertainties, and assumptions that could cause actual results to differ materially from those described in the forward-looking statements.
This content does not constitute financial advice, investment advice, or any other kind of advice, and should not be relied upon as such. Readers are encouraged to conduct their own research and seek professional guidance before making any investment decisions. The completion of the transaction is subject to various conditions, including shareholder and regulatory approvals, and there can be no assurances that the transaction will be completed as described. Neither the author nor the publishing platform assumes any responsibility or liability for any errors or omissions in the content of this press release.
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