(Bloomberg) — Boeing Co. has offered to acquire Spirit AeroSystems Holdings Inc. in a deal funded mostly by stock that values the key supplier at about $35 per share, according to people familiar with the matter.
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Boeing switched its proposed funding from an all-cash offer with the finish line in sight after months of talks between the companies, the people said, who asked not to be identified discussing the confidential matter.
A $35 per share valuation would represent a premium of about 6% to Spirit’s stock as of Monday’s close. It’s also a 22% upside to its closing price on Feb. 29, the day before Boeing’s takeover talks became public.
A Boeing representative declined to comment on the decision to move to an all-stock deal, which was reported earlier by the Wall Street Journal.
“We continue to focus on the providing the best quality products for our customers,” said Joe Buccino, a spokesperson for Wichita, Kansas-based Spirit.
The change in capitalization should ease some of the squeeze on the cash-strapped planemaker, the people said. The final terms are still being hammered out and could include a small amount of cash, they said.
Boeing’s decision to revise the payment terms is the latest twist in an unusually complex transaction, which will also require Spirit to spin off some of its manufacturing plants to Airbus SE. The move will require more due diligence, but isn’t seen as a deal-killer. The three-way transaction is still expected to be announced within a matter of days, the people said.
Boeing Chief Financial Officer Brian West had signaled last month that the company was exploring all payment options to preserve its investment grade rating — and cash. The US planemaker’s financial pressures have mounted as it deals with a sweeping crisis involving its cash-cow 737 Max jet and federal investigations.
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Acquiring Spirit AeroSystems, Boeing’s former Wichita division, would reverse the embattled planemaker’s largest outsourcing for nearly two decades ago and give it greater control over the quality of manufacturing of its jetliner structures.
Boeing is on pace to burn through about $8 billion in cash during the first half of 2024 as it slows work in its factory to retrain mechanics and address quality lapses. The company sold more than $10 billion in bonds in late April to help fund operations, bringing its total debt load to $58 billion.
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