According to reports issued on July 1st, 2024, Boeing Company (BA) has reached an agreement to reacquire Spirit AeroSystems Holdings Inc. (SPR) in a transaction valued at over $4 billion. This deal, structured as an all-stock purchase, signifies a significant shift in the relationship between the two aerospace giants.

Spirit AeroSystems was originally a subsidiary of Boeing before being spun off in 2005 as part of a cost-cutting initiative. However, recent safety concerns and production line disruptions within Boeing have prompted a strategic change. Reacquisition is viewed as a potential remedy for these issues, as it brings crucial manufacturing processes back under Boeing’s direct control.

The specific terms of the agreement stipulate that Boeing will offer $37.25 per share for each outstanding share of Spirit AeroSystems stock. This translates to an overall acquisition value exceeding $4 billion, potentially influencing the final figure by Spirit’s net debt at closing.

The impetus for this reacquisition stems from a series of challenges faced by Boeing. The company has grappled with grounding its 737 MAX aircraft following two fatal crashes, significantly impacting its production capabilities. Concerns regarding quality control measures in Boeing’s supply chain have tarnished its reputation.

By reacquiring Spirit AeroSystems, a major manufacturer of aircraft parts for Boeing, the company aims to regain control over a critical segment of its supply chain. This move could allow for tighter integration and improved oversight of the manufacturing process, leading to enhanced quality control and a faster return to normalcy for Boeing’s production lines.

The news of the reacquisition has been met with mixed reactions within the aerospace industry. While some analysts believe it represents a positive step towards Boeing’s recovery, others express concerns about the potential impact on competition and innovation within the sector.

The deal’s official announcement is expected to occur shortly, providing further details about the agreement and its anticipated timeline for completion. The long-term ramifications of this reacquisition for Boeing, Spirit AeroSystems, and the broader aerospace industry will likely become more evident in the coming months and years.