ARLINGTON — Boeing announced late Sunday that it plans to buy Spirit AeroSystems for $4.7 billion in an all-stock transaction for the manufacturing firm, which was already part of Boeing’s supply chain.
Boeing, based in Arlington, Virginia, announced the purchase in a statement late in the evening.
The acquisition values each share at $37.25, in a deal valued at about $8.3 billion in total, which would include Spirit’s net debt, the aerospace company said.
Spirit, based in Wichita, Kansas, makes key parts for Boeing aircraft.
“We believe this agreement is in the best interest of the flying public, our airline customers, Spirit and Boeing employees, our investors and the country as a whole,” Boeing President and CEO Dave Calhoun said in a statement.
Boeing has owned Spirit in the past, and the company said bringing it back into the company will improve the quality and safety of the planes, which have come under increasing scrutiny from regulators, Congress and airlines.
“By reintegrating Spirit, we can fully align our commercial production systems, such as our Safety and Quality Management Systems, and our workforce with the same priorities, incentives and outcomes, focused on safety and quality,” Calhoun said.
The Spirit purchase goes against Boeing’s long-standing strategy of outsourcing key tasks on its passenger planes. That policy has been criticized because problems at Spirit affected production and delivery of popular Boeing jets such as the 737 and 787 models.
Safety concerns were heightened after a Jan. 5 incident in which a piece covering a door gap on an Alaska Airlines 737 Max 9 jet ejected at 16,000 feet (4,876 meters) over Oregon. The Federal Aviation Administration later announced increased oversight of Boeing and Spirit.
The Justice Department said in a court filing in May that Boeing had breached the terms of a 2021 settlement that allowed the firm to avoid prosecution for actions that led to two fatal crashes of the company’s 737 Max jets more than five years ago.
The same entity is pressuring Boeing to plead guilty to criminal fraud in connection with the two fatal crashes of its 737 Max planes, according to several people who heard federal prosecutors detail a proposed bid on Sunday.
Boeing has until the end of the week to accept or reject the offer, which includes the aerospace giant agreeing to an independent observer who would monitor its compliance with anti-fraud laws, he said.
The plea deal offered to Boeing would allow it to avoid trial related to two deadly crashes of the 737 MAX plane, a lawyer for the victims’ families said Sunday.
Details of the settlement, which requires Boeing to pay a fine and submit to an outside monitor, were disclosed to the families in a Justice Department filing on Sunday, said Paul Cassell, a University of Utah law professor who is representing them.
He said the families would “strongly object” to the settlement if Boeing accepted it and presented it to a judge.
The New York Times reported a week ago that prosecutors were considering such an alternative agreement, known as a deferred prosecution agreement, but the Justice Department said it had not yet made a decision.
In May, the Justice Department concluded that Boeing could be prosecuted for violating another deferred agreement reached after two fatal 737 MAX crashes in 2018 and 2019, in which 346 people died.
Under that ruling, Boeing agreed to pay $2.5 billion to settle fraud charges related to the certification of the 737 MAX.
But the manufacturer came under scrutiny again this year following the Jan. 5 incident of an Alaska Airlines 737 MAX jet making an emergency landing after losing a fuselage panel in flight.
The incident put Boeing’s manufacturing processes back in the crosshairs of regulators and Congress.
Families of the victims have urged federal prosecutors to take Boeing to trial rather than reach another settlement.
But prosecutors also face pressure not to further harm Boeing, considered a key company in the US airline industry as well as national security.
In his filing Sunday, the lead prosecutor “admitted that there is ‘a strong interest’ from the families in going to trial, but insisted that the Justice Department could not prove the charges beyond a reasonable doubt,” Cassell said.
“The families argued over and over again for a trial and for allowing a jury to make that decision,” he added.
