Boeing and Spirit Merger On Track for Early 2023 Despite Challenges
It’s been a bit of a rollercoaster year for Boeing and Spirit AeroSystems, but there’s some exciting news on the horizon for these companies. Despite some bumps in the road, the next step in the merger between Boeing and Spirit is set to take place early next year. This past summer, Boeing made headlines with its announcement of a $4.7 billion stock offer to acquire Spirit.
On January 31, Spirit AeroSystems stockholders are scheduled to vote on the merger agreement, as documented in a filing with the U.S. Securities and Exchange Commission. This may seem like a formality, but it’s a crucial step in making the merger official. If approved, Boeing will use its stock to purchase Spirit, making Spirit’s stockholders new Boeing stockholders. This deal values Spirit at $37.25 per share and amounts to a total of $8.3 billion. During the upcoming vote, Spirit’s stockholders will also have a say in the compensation of Spirit’s named executive officers in relation to the merger. The expected completion date for the acquisition is next summer.
This year has seen its fair share of challenges for both Boeing and Spirit, from a door plug incident on a Boeing aircraft to concerns about production quality, increased federal oversight, and a machinist strike at Boeing that affected production output. Despite these hurdles, the consensus is that both companies are motivated to move forward with the merger. Dr. Larry Straub, an Associate Professor of Management at Newman University, highlights the importance for Boeing and Spirit to shift their focus away from firefighting and back to the basics of running their businesses efficiently. He acknowledges that the integration process will be complex, but stresses the need for both companies to concentrate on operational improvements.
Notably, Spirit’s board of directors is fully backing the merger and recommending that stockholders vote in favor of it. However, the deal is still subject to federal regulatory approval, as Spirit will be divesting certain parts of its business, including segments related to Airbus. Dr. Straub emphasizes that navigating through this process will require a high level of attention and a simultaneous focus on enhancing operational performance.
In conclusion, while both Boeing and Spirit have faced their fair share of challenges in the past year, the upcoming merger presents an opportunity for them to come together and focus on building a stronger, more efficient future.
