Boeing (BA) announced early Monday that it will buy Spirit AeroSystems (SPR) in an all-stock deal that values the fuselage maker at approximately $4.7 billion, or $37.25 per SPR share.
The purchase price represents a roughly 13.3% premium to Spirit stock's June 28 close at $32.87, sending its share price up by more than 3% Monday. BA stock, meanwhile, is higher by roughly 2%.
"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," Boeing CEO Dave Calhoun said in a statement. "By reintegrating Spirit, we can fully align our commercial production systems, including our Safety and Quality Management Systems, and our workforce to the same priorities, incentives and outcomes – centered on safety and quality.
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
Under the agreement, Spirit shareholders will a certain amount of Boeing shares for each SPR share they currently own. The amount will range between 0.18 and 0.25 BA share for each Spirit share and will be calculated based on Boeing's volume-weighted average price (VWAP) over a specified time frame following the closing. If you are a Spirit shareholder, you can check with your broker for details.
In addition, Boeing said that its primary competitor Airbus has entered into an agreement with Spirit to acquire assets in Northern Ireland, Scotland and Malaysia to handle certain commercial work packages that Spirit currently performs for Airbus.
The transaction is subject to approval by Spirit shareholders, regulatory clearance and other closing conditions, Boeing said. If all goes as planned, the transaction is expected to close in mid-2025.
The deal comes about six months after a January 5 incident in which a Boeing Max 9 had a door detach while in flight, as Kiplinger previously reported.
Is Boeing stock a buy, sell or hold?
Even though Boeing is one of the worst Dow Jones stocks this year, Wall Street is bullish on the aerospace company. According to S&P Global Market Intelligence, the average analyst target price for BA stock is $218.08, representing implied upside of nearly 20% to current levels. Additionally, the consensus recommendation is Buy.
Financial services firm UBS is one of the more bullish outfits on the blue chip stock with a Buy rating and $240 price target.
The combination of the two aerospace firms "is a necessary step for a range of stakeholders to gain confidence in MAX quality and safety improvement," said UBS Global Research analyst Gavin Parsons in a recent. "Multiple industry participants we have spoken to believe this combination would improve quality control for Boeing, particularly on the 737 program for which SPR is one of the key suppliers. A combined entity should provide BA with better oversight of SPR processes and help reduce traveled work."
UBS' $240 price target represents implied upside of roughly 30% to current levels.
Related Content
-
Stock Market Today: Stocks Soar on China Trade Talk HopesTreasury Secretary Bessent said current U.S.-China trade relations are unsustainable and signaled hopes for negotiations.
-
2026 Disney Dining Plan Returns: Free Dining for Kids & Resort BenefitsPlan your 2026 Walt Disney World vacation now. Learn about the returning Disney Dining Plan, how kids aged three to nine eat free, and the exclusive benefits of staying at a Disney Resort hotel.
-
Stock Market Today: Stocks Soar on China Trade Talk Hopes
Treasury Secretary Bessent said current U.S.-China trade relations are unsustainable and signaled hopes for negotiations.
-
How Can Investors Profit From AI's Energy Use?Global energy demand is expected to grow by leaps and bounds over the next several years as AI usage accelerates. Here's how to get a piece of the pie.
-
Can Trump Fire Powell? A Supreme Court Case Could DecidePresidential posts threaten to overwhelm decades of precedent and tradition, whatever the nine justices decide.
-
What Are AI Agents and What Can They Do for You?AI agents promise to be the next big thing in artificial intelligence, but what exactly do they do?
-
Should You Buy an iPhone Now Before Tariffs Hit?Looming tariffs can make an iPhone purchase seem urgent. Here's what to do if you need another phone but want to save money.
-
SRI Redefined: Going Beyond Socially Responsible InvestingNow that climate change has progressed to a changed climate, sustainable investing needs to evolve to address new demands of resilience and innovation.
-
Here's When a Lack of Credit Card Debt Can Cause You ProblemsUsually, getting a new credit card can be difficult if you have too much card debt, but this bank customer ran into an issue because he had no debt at all.
-
33 Stocks That Could Rally 50% or More This YearAnalysts say these S&P 500 stocks have at least 50% price upside over the next year or so.
