Berliner Boersenzeitung - Boeing closes takeover of aviation supplier Spirit

Closure of the deal, first announced in July 2024, comes at a "pivotal" moment for the aviation giant, said Boeing Chief Executive Kelly Ortberg. The deal is worth $8.3 billion, including Spirit debt assumed by Boeing.

"As we welcome our new teammates and bring our two companies together, our focus is on maintaining stability so we can continue delivering high quality airplanes, differentiated services, and advanced defense capabilities for our customers and the industry," Ortberg said.

Wichita, Kansas-based Spirit manufactures fuselages for commercial planes, as well as key parts for defense and space projects.

The deal's closure follows antitrust approvals in the United States and Europe that included the sale to Airbus of all Spirit's businesses that currently supply the European aerospace group -- Boeing's main competitor.

The transaction restores Spirit to Boeing about two decades after Boeing sold the assets in a move executives said would lower procurement costs and enhance Boeing's focus on "large-scale systems integration," which Boeing saw at the time as a strategic priority.

But Boeing has stumbled badly in recent years, first with pair of fatal 737 MAX crashes in 2018 and 2019 caused in part by a flawed flight stabilizing feature, then by a January 2024 incident in which an Alaska Airlines flight was forced to make an emergency landing after a window on a 737 MAX blew out.

Since the Alaska Airlines incident, Boeing has tightened quality control practices under close scrutiny from US air safety officials and replaced key leaders, including the CEO and head of commercial aviation.

Boeing Commercial head Stephanie Pope described a gradual integration in a letter to the two companies' commercial aviation employees that emphasized the need for teamwork to produce some 6,000 planes through the early 2030s.

"As we start this next chapter, I encourage you to keep an open mind, support your teammates, and give each other grace," Pope said. "While our teams did extensive work to prepare for this transition, it is not easy to integrate two companies, multiple sites and more than 15,000 teammates."

While the deal means that Spirit Defense will be part of Boeing for financial reporting purposes, the unit will have independent governance and operations. Such a structure is employed in defense, where suppliers serve multiple clients that are sometimes partners and sometimes competitors.

The structure "preserves and protects Spirit Defense's ability to perform work for any defense or space prime, including Boeing and its competitors, by implementing strict operational boundaries -– or 'firewalls' -– that ensures the protection of competitive information and avoids conflicts of interest," said a Boeing spokesman.

Shares of Boeing rose 1.9 percent in mid-morning trading.

(A.Lehmann--BBZ)