Boeing agrees to buy Spirit AeroSystems for $4.7 billion

Boeing has reached a deal to acquire Spirit AeroSystems for $4.7 billion, according to Reuters. This ends month-long discussions on a deal that would aid an otherwise ailing company. Spirit was the manufacturer of the door plug involved in the January incident involving an Alaska Airlines plane. Spirit, along with Boeing, has faced intense regulatory scrutiny after the incident. It has also affected business as the production of both Boeing and Airbus plummeted.

Boeing will reportedly pay $37.25 per share for Spirit Aero in an all-stock deal. The official announcement is yet to come. Boeing is set to assume about $3.5 billion of Spirit's debt as part of the deal. The company already showed $4 billion in losses in the first quarter, with similar expectations for the next. The planemaker's credit rating is just one level above 'speculative grade'.

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Spirit AeroSystems was part of Boeing till 2005 when it was spun off as a separate entity. Cut to 2024, and Boeing is facing a terrible year. Integrating with its supplier can potentially offset some losses for the company. The deal, however, is subject to regulatory approvals. Airbus is also set to get a piece of the pie.

Meanwhile, Boeing is facing legal heat with the Justice Department over settlement violations in the 2018 and 2019 crashes. Prosecutors are currently in discussion with Boeing and the victims' relatives to reach a possible solution. The victims and prosecutors have reportedly urged the Justice Department to penalise Boeing for the disaster.

The key question remains: Can integrating with Spirit AeroSystems help Boeing? Nothing will help if Boeing is convicted of criminal charges on July 7.