Boeing agrees to buy spinoff Spirit Aerosystems as part of plan to shore up safety

New York (CNN) — Boeing has agreed to buy Spirit Aerosystems, one of its major suppliers and manufacturing partners, as part of its plan to overhaul the aircraft maker’s badly damaged safety reputation.

The all-stock deal, that values the supplier at $4.7 billion, or $37.25 per share, was announced Monday after months of discussions between Boeing and the company it spun off in 2005. Boeing in March announced its intention to buy Spirit, saying recombining the companies would boost safety.

The total transaction value is approximately $8.3 billion, including Spirit’s last reported net debt.

“We believe this deal is in the best interest of the flying public, our airline customers, the employees of Spirit and Boeing, our shareholders and the country more broadly,” said Boeing President and CEO Dave Calhoun in a statement.

Spirit AeroSystems makes major parts of several Boeing models, including the fuselages for the 737 Max. The parts are then shipped to Boeing’s factories for assembly. The company also makes parts for Boeing’s rival Airbus, although Boeing is Spirit’s largest customer.

But Spirit has had its own series of quality control issues in recent years, and Boeing had agreed to pay the company more money to try to improve Spirit’s quality and reliability issues, which had damaged Boeing’s output and reputation.

Sprit was involved in the January door plug blowout on an Alaska Airways 737 Max shortly after takeoff that left a gaping hole in the side of the aircraft.

Boeing said last week two different groups of employees were charged with doing work to the door plug, which is a part that is used in place of an emergency exit door. The first group of employees removed the door plug to address problems with rivets that were made by Spirit AeroSystems. But the Boeing staff didn’t generate the paperwork indicating they had removed the door plug, along with the four bolts necessary to hold it in place, in order to do that work. So the second group of employees replaced it, unaware the bolts were missing.

Several whistleblowers have come forward since that incident, including some employees and contractors for Spirit. Last week, for example, a whistleblower from a contractor for Spirit Aerosystems said he notified the company of wide gaps in a key part of 787 Dreamliner planes that posed “catastrophic” danger to passengers.

Spirit has been involved in other safety problems for Boeing. In 2023 it used a “non-standard manufacturing process” when joining parts of the fuselages of 737 Max jets, leading Boeing to halt deliveries of the planes. Earlier this year, a Spirit employee notified Boeing that two holes may not have been drilled exactly to Boeing’s requirements, which required Boeing to rework about 50 planes that had not yet been delivered.

The US Justice Department is nearing an agreement with Boeing that would include a corporate monitor and a fine in exchange for a guilty plea to criminal charges, according to lawyers representing the families of victims of two fatal 737 Max crashes, who harshly rebuked the offer as a “sweetheart deal.”

This is a developing story and will be updated.

CNN’s Chris Isidore contributed to this report.

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