Spirit AeroSystems, commonly known as “Spirit,” has announced a definitive merger agreement where The Boeing Company, referred to as “Boeing,” will acquire Spirit at $37.25 per share in Boeing common stock, as outlined by the specified collar. Valued at $37.25 per share, the transaction marks an equity value of approximately $4.7 billion and an enterprise value of about $8.3 billion, including Spirit’s last reported net debt. This purchase price signifies a 30% premium over Spirit’s closing stock price of $28.60 on February 29, 2024, the day prior to the announcement by Spirit and Boeing that they were exploring 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 today that it entered into a binding term sheet with Airbus SE [EUR: AIR.PA] (“Airbus”). 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.”
Under the definitive merger agreement with Boeing, each Spirit shareholder will receive a number of Boeing shares determined by an exchange ratio. This ratio is calculated by dividing $37.25 by the volume weighted average share price (VWAP) of Boeing over the 15 trading days ending two days before the closing date (“Closing Price”). The calculation is bounded by a minimum of $149.00 and a maximum of $206.94 per Boeing share. At a Closing Price of $149.00 or lower, Spirit shareholders will obtain 0.25 Boeing shares for each Spirit share. If the Closing Price is $206.94 or higher, they will receive 0.18 Boeing shares per Spirit share.
The merger agreement, along with a term sheet for a potential Airbus transaction, received unanimous approval from the Spirit Board of Directors. The closure of the Boeing merger hinges on the divestiture of Spirit’s Airbus segments and other conditions, including Spirit shareholder approval and regulatory clearances. A concurrent closing with the Boeing deal is anticipated for the Airbus transaction, contingent on finalizing an agreement with Airbus and similar closing conditions. These transactions are projected to complete by mid-2025.
Furthermore, Spirit intends to divest certain operations, specifically its activities in Subang, Malaysia; Prestwick, Scotland; and Belfast, Northern Ireland, excluding those supporting Airbus programs. Morgan Stanley & Co. LLC is the principal financial advisor to Spirit, with Moelis & Company LLC also providing financial advisory services. Skadden, Arps, Slate, Meagher & Flom LLP is the legal advisor.
