Deal On Cards? Boeing Explores Reacquiring Spirit AeroSystems Amidst Quality Concerns, Production Challenges

Boeing Co BA is reportedly discussing acquiring Spirit AeroSystems Holdings Inc SPR, the former jet-fuselage supplier it spun off two decades ago. 

The troubled aerospace company, with a current market valuation of approximately $3.3 billion, has been plagued by manufacturing issues, significantly impacting production at Boeing. 

Spirit’s strategic options are being explored as it faces scrutiny over quality problems affecting Boeing’s 737 MAX jets. 

Talks with Spirit involve the possibility of reacquisition, but a deal is not guaranteed. Additionally, Spirit is exploring the potential sale of its operations in Ireland, which manufactures components for Boeing’s rival, Airbus SE EADSF EADSY.

The company, formed in 2005 when Boeing divested some factories, relies heavily on Boeing for nearly two-thirds of its sales, with Airbus and defense firms contributing to the remainder, the Wall Street Journal notes. 

The recent Alaska Airlines door-plug incident involving a fuselage made by Spirit has intensified the focus on quality issues at both Boeing and Spirit, prompting discussions about the possibility of Boeing’s acquisition.

Boeing CEO Dave Calhoun, who initially dismissed acquisition suggestions amid Spirit’s problems, has recently adopted a more open stance. 

Spirit’s financial struggles have persisted, leading to a $100 million cash infusion from Boeing last year. 

Ongoing negotiations with Airbus for a commercial agreement have yet to yield results. 

Acquiring Spirit would present Boeing with the dual challenge of improving its operations and addressing quality-control concerns within a 90-day timeframe set by the Federal Aviation Administration. 

Boeing’s efforts to exert influence over Spirit have been extensive, but resolving issues at the supplier remains a complex task.

Price Action: BA stock is down 1.28% at $203.02, and SPR shares are up 16.1% at $33.20 on the last check Friday.

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

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