Spirit AeroSystems has entered into a definitive merger agreement under which The Boeing Company will acquire Spirit for $37.25 per share in Boeing common stock (subject to the collar described below). At $37.25 per share, this represents an equity value of approximately $4.7 billion and an enterprise value of approximately $8.3 billion including Spirit’s last reported net debt. The price of $37.25 per share represents a 30% premium to Spirit’s closing stock price of $28.60 on February 29, 2024, the last day before both Spirit and Boeing issued press releases confirming they were in discussions regarding a potential transaction.
“After carefully evaluating Boeing’s offer to combine, we are confident this transaction is in the best interest of Spirit and its shareholders, and will benefit Spirit’s other stakeholders,” said Patrick M. Shanahan, president and Chief Executive Officer of Spirit. “Bringing Spirit and Boeing together will enable greater integration of both companies’ manufacturing and engineering capabilities, including safety and quality systems.”
Spirit also announced that it entered into a binding term sheet with Airbus SE. Under the term sheet, the parties will continue to negotiate in good faith to enter into definitive agreements for Airbus to acquire certain Spirit assets that serve Airbus programs, concurrently with the closing of Spirit’s acquisition by Boeing.
Shanahan continued, “We are proud of the part we have played in Airbus’ programs and believe bringing these programs under Airbus ownership will enable greater integration and alignment.”
Transaction Terms
Under the terms of the definitive merger agreement with Boeing, Spirit shareholders will receive for each of their shares of Spirit common stock a number of shares of Boeing common stock equal to an exchange ratio calculated as $37.25 divided by the volume weighted average share price (VWAP) of Boeing common stock over the 15-trading-day period ending on the second trading day prior to the closing, subject to a floor of $149 per share of Boeing common stock and a ceiling of $206.94 per share of Boeing common stock. Spirit shareholders will receive 0.25 shares of Boeing common stock for each of their shares of Spirit common stock if the Closing Price is at or below $149.00, and 0.18 shares of Boeing common stock for each of their shares of Spirit common stock if the Closing Price is at or above $206.94.
The definitive merger agreement with Boeing and the term sheet with Airbus were unanimously approved by the Spirit Board of Directors. The closing under the definitive merger agreement with Boeing is subject to the completion of the divestiture of the Airbus businesses by Spirit and is subject to other closing conditions, including approval of the definitive merger agreement by Spirit shareholders and receipt of regulatory approvals. The closing of the Airbus transaction, if a definitive agreement for the Airbus transaction is entered into with Airbus, will be subject to the substantially concurrent closing of the Boeing acquisition of Spirit and will be subject to other closing conditions, including the receipt of regulatory approvals. The closings of these transactions are expected to occur in mid-2025.
In addition, Spirit plans to pursue the divestiture of certain operations. These include Spirit’s business and operations in (1) Subang, Malaysia, (2) Prestwick, Scotland that support Airbus programs, and (3) Belfast, Northern Ireland other than those that support Airbus programs.
Advisors
Morgan Stanley & Co. LLC is serving as lead financial advisor to Spirit. Moelis & Company LLC is also serving as a financial advisor to Spirit. Skadden, Arps, Slate, Meagher & Flom LLP is serving as legal counsel to Spirit.
