By Mike Stone and Allison Lampert
WASHINGTON (Reuters) – Boeing agreed on Sunday to acquire Spirit AeroSystems (NYSE:) for more than $4 billion, two people familiar with the matter said, ending months of talks on a deal the U.S. planemaker hopes will help ease a growing safety crisis.
Boeing (NYSE:) will pay $37.25 per share of Spirit Aero in an all-stock deal, the two people said. The boards of directors of Boeing and Spirit met on Sunday and agreed to the terms, and an official announcement is likely to be made early Monday, they said.
The acquisition values Spirit at about $4.7 billion, according to one of the sources.
The deal, which is subject to regulatory approvals, would result in Spirit breaking up, with some of the Kansas-based supplier's assets going to French plane maker Airbus.
Airbus, Spirit and Boeing declined to comment.
Boeing is trying to overcome a year of difficulties that was triggered on Jan. 5 by a mid-air explosion of a door stopper on a new 737 MAX 9 jet, which exposed a myriad of safety and quality problems. Those issues have caused a major production slowdown at Boeing, with repercussions across the global commercial aviation industry.
Spirit, the maker of the door stopper, was spun off from Boeing in 2005 in one of a series of moves that critics say were emblematic of a focus on cost cutting over quality.
Boeing made the decision to buy back Spirit following the Jan. 5 incident, which took place on a flight operated by Alaska Airlines, as part of an effort to overhaul its safety problems and shore up its production line.
Boeing had previously discussed paying $35.50 a share in cash for Spirit, but this was raised to $37.25 when the deal became stock-based, one of the sources said.
Terms of a side deal for Spirit to sell its Europe-focused operations to Airbus were not immediately clear.
According to people familiar with the matter, both deals will be announced simultaneously on Monday morning. The two deals mark a transatlantic spinoff of the world's largest independent aerostructures maker, which has diversified into making parts for Airbus and other manufacturers since Boeing spun it off nearly two decades ago.
PRODUCTION LIMIT
Buying Spirit Aero will not immediately solve Boeing's problems.
Following the door-stop incident in January, the Federal Aviation Administration imposed a production cap on Boeing's best-selling MAX jets.
On Sunday, Reuters reported that the U.S. Justice Department will charge Boeing with criminal fraud over two fatal crashes and ask the planemaker to plead guilty or face trial.
The iconic American company has been losing market share to Airbus for years and is still dealing with the consequences of the two accidents that killed almost 350 people and forced the grounding of the 737 MAX.
Those accidents led to the appointment of current CEO Dave Calhoun, who was brought in to resolve problems at the manufacturer but who will leave at the end of this year with the company under increased regulatory scrutiny and with a reputation that has taken a hit.
On June 18, U.S. senators sharply criticized Calhoun over the planemaker's safety problems and repeatedly asked him about his salary. Some airlines have publicly and privately expressed frustration with Boeing over delivery delays and the company's ongoing problems.
Boeing recently submitted a comprehensive plan to the FAA that addresses “systemic quality control issues” at the company.
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