Boeing Co. BA has proposed to acquire Spirit AeroSystems Holdings Inc. SPR in a deal largely financed by stock, valuing the supplier at approximately $35 per share.
What Happened: The proposed acquisition, which represents a 6% premium to Spirit’s stock price on Monday, is a shift from Boeing’s earlier all-cash offer, Bloomberg reported, citing people familiar with the matter. The change in funding comes after several months of negotiations between the two companies.
Boeing’s decision to revise the payment terms is seen as a strategic move to alleviate some of the financial pressure on the company, which has been grappling with the fallout from the 737 Max crisis and federal investigations. The final terms of the deal, which may include a small amount of cash, are still under discussion.
Despite its financial challenges, Boeing has been making moves to strengthen its position. The proposed acquisition of Spirit AeroSystems, a key supplier of the 737 Max, would allow Boeing to regain control over the quality of its jetliner structures.
Boeing and Spirit AeroSystems did not immediately respond to Benzinga's request for comment.
Why It Matters: The proposed acquisition comes at a crucial time for Boeing, which is facing potential criminal charges from the U.S. Department of Justice for violating a settlement related to the 737 Max crashes. The Justice Department is expected to decide on whether to prosecute Boeing by Jul. 7.
Price Action: Spirit AeroSystems Holdings Inc.’s stock closed at $33.07 on Monday, down 1.46% for the day. In after-hours trading, the stock further declined by 1.27%. Year to date, Spirit AeroSystems has seen a modest increase of 7.51%.
Meanwhile, Boeing Co.’s stock closed at $179.10, up 1.44% for the same day. The after-hours trading price remained unchanged. Over the past year, Boeing’s stock has decreased by 12.88%, according to the data from Benzinga Pro.
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This story was generated using Benzinga Neuro and edited by Kaustubh Bagalkote
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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