Market Commentary

Boeing's Strategic Buy of Spirit AeroSystems & Political Trades

Turra Rasheed
1 Jul 2024 · 1 minute read

Boeing Co (BA:US) has recently made headlines with its agreement to acquire Spirit AeroSystems in a deal valued at $4.7 billion. This acquisition marks a significant move for the aerospace giant, bringing the parts supplier back under its wing after two decades apart. The total transaction value, including Spirit’s last reported net debt, is about $8.3 billion, valuing the supplier at approximately $37.25 per share.

The acquisition follows months of negotiations involving both Boeing and its European rival Airbus. Spirit AeroSystems, known for manufacturing the body of Boeing’s 737 Max jet, has faced scrutiny over manufacturing issues that have slowed production. This deal aims to address these concerns, with Boeing's CEO Dave Calhoun emphasizing that reintegrating Spirit will align their commercial production systems, including safety and quality management.

This acquisition comes at a crucial time for Boeing, as the company continues to grapple with the fallout from the mid-air blowout of a section of the main body of one of its 737 Max aircraft in January. By bringing Spirit back into its fold, Boeing hopes to enhance safety and streamline its production processes, bolstering confidence in its flagship aircraft.

The price decline caused by problems with Boeing is also reflected in the trades made by politicians in the company's stock. Notably, Representative Bill Keating and Representative Blake Moore have been involved in selling the company shares this year.

As Boeing navigates its path forward, the company’s strategic decisions will likely continue to attract attention from both the market and regulatory bodies. The focus will remain on how effectively Boeing can integrate Spirit AeroSystems to enhance safety, streamline production, and ultimately restore its reputation in the aerospace industry.