Boeing plans to acquire Spirit AeroSystems for $4.7 billion

Boeing plans to acquire Spirit AeroSystems for $4.7 billion. The transaction aims to improve aircraft quality and safety amid increased oversight by Congress, airlines and the Department of Justice.

“We believe this agreement is in the best interests of flying passengers, our airline customers, Spirit and Boeing employees, our shareholders and the broader country,” Boeing President and CEO Dave Calhoun said in a statement.

Boeing, based in Arlington, Virginia, previously owned Spirit AeroSystems, which is based in Wichita, Kansas.

“By reintegrating Spirit, we can fully align our commercial manufacturing systems, including our safety and quality management systems, and our workforce with the same priorities, incentives and outcomes – focused on safety and quality,” Calhoun said.

Safety concerns grew after the door of an Alaska Airlines 737 Max plane blew off Jan. 5 at 5,000 feet over Oregon.

Following the incident, the Federal Aviation Administration announced increased oversight of Boeing and Spirit, the plane’s fuselage supplier, and the Justice Department launched an investigation.

According to Boeing, the acquisition values ​​Spirit’s equity at $4.7 billion, or $37.25 per share, and the total transaction value is approximately $8.3 billion, including Spirit’s reported net debt.

The Justice Department is pressing Boeing to admit criminal fraud related to the 2018 and 2019 crashes of 737 Max jets in Indonesia and Ethiopia that killed 346 people.

Boeing has until the end of the week to accept the offer, which includes pleading guilty to conspiracy charges from 2021, paying a fine and agreeing to three years of probation under the supervision of an independent monitor.

However, Paul Cassell, a lawyer representing the families of 15 victims, told CBS News that the proposal was “another good deal” and added that the families would “strongly oppose” the deal.

In June, the FAA opened an investigation into the use of titanium parts with falsified quality documentation in Boeing and Airbus passenger planes.

Both Boeing and Airbus have ensured the safety of the planes with these parts but have pledged to remove them from jets that have not yet been delivered to airlines.

In October, Spirit replaced its CEO with Patrick Shanahan, a former Boeing executive who previously served as defense secretary in the Trump administration.

“The combination of Spirit and Boeing will enable better integration of the manufacturing and engineering capabilities of both companies, including safety and quality systems,” Shanahan said.

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In addition, the companies announced an agreement with Airbus to acquire Spirit’s assets related to programs overseen by the European aerospace company.

This agreement will go into effect once Boeing completes its transaction with Spirit.