Enters into Term Sheet for Airbus to Assume
Ownership of Certain Airbus Program Assets
WICHITA, Kan., July 1, 2024 /PRNewswire/ -- Spirit
AeroSystems [NYSE: SPR] ("Spirit") today announced it has entered
into a definitive merger agreement under which The Boeing Company
[NYSE: BA] ("Boeing") will acquire Spirit for $37.25 per share in Boeing common stock (subject
to the collar described below). At $37.25 per share, this represents an equity value
of approximately $4.7 billion and an
enterprise value of approximately $8.3
billion including Spirit's last reported net debt. The price
of $37.25 per share represents a 30%
premium to Spirit's closing stock price of $28.60 on February 29,
2024, the day before Spirit and Boeing issued press releases
confirming they were in discussions regarding a potential
transaction.
"After carefully evaluating Boeing's offer to combine, we are
confident this transaction is in the best interest of Spirit and
its shareholders, and will benefit Spirit's other stakeholders,"
said Patrick M. Shanahan, President
and Chief Executive Officer of Spirit. "Bringing Spirit and Boeing
together will enable greater integration of both companies'
manufacturing and engineering capabilities, including safety and
quality systems."
Spirit also announced today that it entered into a binding term
sheet with Airbus SE [EUR: AIR.PA] ("Airbus"). Under the term
sheet, the parties will continue to negotiate in good faith to
enter into definitive agreements for Airbus to acquire certain
Spirit assets that serve Airbus programs, concurrently with the
closing of Spirit's acquisition by Boeing.
Shanahan continued, "We are proud of the part we have played in
Airbus' programs and believe bringing these programs under Airbus
ownership will enable greater integration and alignment."
Transaction Terms
Under the terms of the definitive merger agreement with Boeing,
Spirit shareholders will receive for each of their shares of Spirit
common stock a number of shares of Boeing common stock equal to an
exchange ratio calculated as $37.25
divided by the volume weighted average share price (VWAP) of Boeing
common stock over the 15-trading-day period ending on the second
trading day prior to the closing (the "Closing Price"), subject to
a floor of $149.00 per share of
Boeing common stock and a ceiling of $206.94 per share of Boeing common stock. Spirit
shareholders will receive 0.25 shares of Boeing common stock for
each of their shares of Spirit common stock if the Closing Price is
at or below $149.00, and 0.18 shares
of Boeing common stock for each of their shares of Spirit common
stock if the Closing Price is at or above $206.94.
The definitive merger agreement with Boeing and the term sheet
with Airbus were unanimously approved by the Spirit Board of
Directors. The closing under the definitive merger agreement with
Boeing is subject to the completion of the divestiture of the
Airbus businesses by Spirit and is subject to other closing
conditions, including approval of the definitive merger agreement
by Spirit shareholders and receipt of regulatory approvals. The
closing of the Airbus transaction, if a definitive agreement for
the Airbus transaction is entered into with Airbus, will be subject
to the substantially concurrent closing of the Boeing acquisition
of Spirit and will be subject to other closing conditions,
including the receipt of regulatory approvals. The closings of
these transactions are expected to occur in mid-2025.
In addition, Spirit plans to pursue the divestiture of certain
operations. These include Spirit's business and operations in (1)
Subang, Malaysia, (2) Prestwick,
Scotland that support Airbus
programs, and (3) Belfast, Northern
Ireland other than those that support Airbus
programs.
Advisors
Morgan Stanley & Co. LLC is serving as lead financial
advisor to Spirit. Moelis & Company LLC is also serving as a
financial advisor to Spirit. Skadden, Arps, Slate, Meagher &
Flom LLP is serving as legal counsel to Spirit.
On the web: www.spiritaero.com
On Twitter: @SpiritAero
About Spirit AeroSystems Inc.
Spirit AeroSystems is one of the world's largest manufacturers
of aerostructures for commercial airplanes, defense platforms, and
business/regional jets. With expertise in aluminum and advanced
composite manufacturing solutions, the company's core products
include fuselages, integrated wings and wing components, pylons,
and nacelles. We are leveraging decades of design and manufacturing
expertise to be the most innovative and reliable supplier of
military aerostructures, and specialty high-temperature materials,
enabling warfighters to execute complex, critical missions. Spirit
also serves the aftermarket for commercial and business/regional
jets. Headquartered in Wichita,
Kansas, Spirit has facilities in the U.S., U.K.,
France, Malaysia and Morocco. More information is available at
www.spiritaero.com.
Cautionary Statement Regarding Forward-Looking
Statements
This press release includes "forward-looking statements" that
involve many risks and uncertainties. Forward-looking statements
generally can be identified by the use of forward-looking
terminology such as "aim," "anticipate," "believe," "could,"
"continue," "estimate," "expect," "forecast," "goal," "intend,"
"may," "might," "model," "objective," "outlook," "plan,"
"potential," "predict," "project," "seek," "should," "target,"
"will," "would," and other similar words, or phrases, or the
negative thereof, unless the context requires otherwise.
Forward-looking statements in this press release include, but are
not limited to, statements regarding the proposed acquisition of
Spirit (together with its consolidated subsidiaries, the "Company")
by Boeing (the "Boeing Merger Transaction") and the proposed
divestiture of a portion of the Company's business to Airbus SE
("Airbus") and its affiliates (the "Airbus Business Disposition")
in connection with the Boeing Merger Transaction as contemplated by
the term sheet between Spirit AeroSystems, Inc., a wholly
owned subsidiary of Spirit (the "Operating Company"), and Airbus,
including, without limitation, statements about the expected timing
of completion of the Boeing Merger Transaction and the Airbus
Business Disposition (together, the "Transactions," and each a
"Transaction") and other aspects of the Transactions.
Forward-looking statements are based on circumstances as of the
date on which the statements are made and they reflect management's
current views with respect to future events and are subject to
risks and uncertainties, both known and unknown. Actual results may
vary materially from those anticipated in forward-looking
statements. Investors should not place undue reliance on any
forward-looking statements.
Important factors that could cause actual results to differ
materially from those in the forward-looking statements include
risks and uncertainties relating to the Transactions, including,
among others: the possible inability of the Company to negotiate
and enter into definitive agreements with Airbus and its affiliates
with respect to the Airbus Business Disposition; the possible
inability of the parties to a Transaction to obtain the required
regulatory approvals for such Transaction and to satisfy the other
conditions to the closing of such Transaction (including, in the
case of the Boeing Merger Transaction, approval of the merger
agreement by Spirit's stockholders) on a timely basis or at all;
the possible occurrence of events that may give rise to a right of
one or more of the parties to the Boeing Merger Transaction merger
agreement to terminate such merger agreement; the risk that the
Boeing Merger Transaction merger agreement is terminated under
circumstances requiring Spirit to pay a termination fee; the risk
that the Company is unable to consummate the Transactions on a
timely basis or at all for any reason, including, without
limitation, failure to obtain the required regulatory approvals,
failure to obtain Spirit stockholder approval of the Boeing Merger
Transaction merger agreement or failure to satisfy other conditions
the closing of either of the Transactions; the potential for the
announcement or pendency of the Transactions or any failure to
consummate the Transactions to adversely affect the market price of
Spirit's common stock or the Company's financial performance or
business relationships; risks relating to the value of Boeing's
common stock to be issued in the Boeing Merger Transaction; the
possibility that the anticipated benefits of the Transactions
cannot be realized in full or at all or may take longer to realize
than expected; the possibility that costs or difficulties related
to the integration of the Company's operations with those of Boeing
will be greater than expected; risks relating to significant
transaction costs; the intended or actual tax treatment of the
Transactions; potential litigation or other legal or regulatory
action relating to the Transactions or otherwise relating to the
Company or other parties to the Transactions that could be
instituted against the Company or such other parties or Spirit's or
such other parties' respective directors and officers and the
effect of the outcome of any such litigation or other legal or
regulatory action; risks associated with contracts containing
provisions that may be triggered by the Transactions; potential
difficulties in retaining and hiring key personnel or arising in
connection with labor disputes during the pendency of or following
the Transactions; the risk of other Transaction-related disruptions
to the business, including business plans and operations, of the
Company; the potential for the Transactions to divert the time and
attention of management from ongoing business operations; the
potential for contractual restrictions under the agreements
relating to the Transactions to adversely affect the Company's
ability to pursue other business opportunities or strategic
transactions; and competitors' responses to the
Transactions.
Additional important factors that could cause actual results to
differ materially from those reflected in the forward-looking
statements and that should be considered in evaluating the
Company's outlook include, but are not limited to, the following:
the continued fragility of the global aerospace supply chain
including the Company's dependence on its suppliers, as well as the
cost and availability of raw materials and purchased components,
including increases in energy, freight, and other raw material
costs as a result of inflation or continued global inflationary
pressures; the Company's ability and its suppliers' ability and
willingness to meet stringent delivery (including quality and
timeliness) standards and accommodate changes in the build rates or
model mix of aircraft under existing contractual commitments,
including the ability or willingness to staff appropriately or
expend capital for current production volumes and anticipated
production volume increases; the Company's ability to maintain
continuing, uninterrupted production at its manufacturing
facilities and its suppliers' facilities; the Company's ability,
and its suppliers' ability, to attract and retain the skilled work
force necessary for production and development in an extremely
competitive market; the effect of economic conditions, including
increases in interest rates and inflation, on the demand for the
Company's and its customers' products and services, on the
industries and markets in which it operates in the U.S. and
globally, and on the global aerospace supply chain; the general
effect of geopolitical conditions, including Russia's invasion of Ukraine and the resultant sanctions being
imposed in response to the conflict, including any trade and
transport restrictions; the war in Israel and the Gaza
Strip and the potential for expansion of the conflict in the
surrounding region, which may impact certain suppliers' ability to
continue production or make timely deliveries of supplies required
to produce and timely deliver the Company's products, and may
result in sanctions being imposed in response to the conflict,
including trade and transport restrictions; the Company's
relationships with the unions representing many of its employees,
including the Company's ability to successfully negotiate new
agreements, and avoid labor disputes and work stoppages with
respect to its union-represented employees; the impact of
significant health events, such as pandemics, contagions or other
public health emergencies (including the COVID‑19 pandemic) or fear
of such events, on the demand for the Company's and its customers'
products and services and on the industries and markets in which
the Company operates in the U.S. and globally; the timing and
conditions surrounding the full worldwide return to service
(including receiving the remaining regulatory approvals) of the
B737 MAX, future demand for the aircraft, and any residual impacts
of the B737 MAX grounding on production rates for the aircraft; the
Company's reliance on Boeing and Airbus and its affiliates for a
significant portion of its revenues; the business condition and
liquidity of the Company's customers and their ability to satisfy
their contractual obligations to the Company; the certainty of the
Company's backlog, including the ability of customers to cancel or
delay orders prior to shipment on short notice, and the potential
impact of regulatory approvals of existing and derivative models;
the Company's ability to accurately estimate and manage
performance, cost, margins, and revenue under its contracts, and
the potential for additional forward losses on new and maturing
programs; the Company's accounting estimates for revenue and costs
for its contracts and potential changes to those estimates; the
Company's ability to continue to grow and diversify its business,
execute its growth strategy, and secure replacement programs,
including its ability to enter into profitable supply arrangements
with additional customers; the outcome of product warranty or
defective product claims and the impact settlement of such claims
may have on the Company's accounting assumptions; competitive
conditions in the markets in which the Company operates, including
in-sourcing by commercial aerospace original equipment
manufacturers; the Company's ability to successfully negotiate, or
re-negotiate, future pricing under its supply agreements with
Boeing, Airbus and its affiliates and other customers; the
possibility that the Company's cash flows may not be adequate for
its additional capital needs; any reduction in the Company's credit
ratings; the Company's ability to access the capital or credit
markets to fund its liquidity needs, and the costs and terms of any
additional financing; the Company's ability to avoid or recover
from cyber or other security attacks and other operations
disruptions; legislative or regulatory actions, both domestic and
foreign, impacting the Company's operations, including the effect
of changes in tax laws and rates and the Company's ability to
accurately calculate and estimate the effect of such changes;
spending by the U.S. and other governments on defense; pension plan
assumptions and future contributions; the effectiveness of the
Company's internal control over financial reporting; the outcome or
impact of ongoing or future litigation, arbitration, claims, and
regulatory actions or investigations, including the Company's
exposure to potential product liability and warranty claims;
adequacy of the Company's insurance coverage; the Company's ability
to continue selling certain receivables through its receivables
financing programs; the Company's ability to effectively integrate
recent acquisitions, along with other acquisitions it pursues, and
generate synergies and other cost savings therefrom, while avoiding
unexpected costs, charges, expenses, and adverse changes to
business relationships and business disruptions; and the risks of
doing business internationally, including fluctuations in foreign
currency exchange rates, impositions of tariffs or embargoes, trade
restrictions, compliance with foreign laws, and domestic and
foreign government policies.
The factors described above are not exhaustive, and it is not
possible for Spirit to predict all factors that could cause actual
results to differ materially from those reflected in its
forward‑looking statements. These factors speak only as of the date
hereof, and new factors may emerge or changes to the foregoing
factors may occur that could impact the Company's business or the
Transactions. As with any projection or forecast, these statements
are inherently susceptible to uncertainty and changes in
circumstances. Except to the extent required by law, Spirit
undertakes no obligation to, and expressly disclaims any obligation
to, publicly update or revise any forward-looking statements,
whether as a result of new information, future events, or
otherwise. Refer to the section captioned "Risk Factors" in
Spirit's Annual Report on Form 10-K for the fiscal year ended
December 31, 2023, filed with the
U.S. Securities and Exchange Commission (the "SEC") on February 22, 2024, for a more complete discussion
of the factors described in the immediately preceding paragraph and
other factors that may affect the Company's business.
No Offer or Solicitation
This press release is not intended to and shall not constitute
an offer to sell or the solicitation of an offer to buy any
securities, nor shall there be any sale of securities in any
jurisdiction in which such offer, solicitation or sale would be
unlawful prior to registration or qualification under the
securities laws of any such jurisdiction. No offer of securities
shall be made except by means of a prospectus meeting the
requirements of Section 10 of the Securities Act of 1933, as
amended.
Important Information and Where to Find It
In connection with the proposed transaction between Spirit and
Boeing, Boeing will file with the SEC a registration statement on
Form S-4, which will include a proxy statement of Spirit that will
also be a prospectus of Boeing with respect to shares of common
stock of Boeing to be issued in the proposed transaction (the
"proxy statement/prospectus"). Spirit and Boeing may also file
other documents with the SEC regarding the proposed transaction.
This communication is not a substitute for the registration
statement, the proxy statement/prospectus or any other document
Spirit or Boeing may file with the SEC. Investors and
security holders are urged to read the proxy statement/prospectus
and any other relevant documents that are filed or will be filed
with the SEC when they become available, because they contain or
will contain important information about the proposed transaction
and related matters. Investors and security holders may obtain
free copies of the registration statement and the proxy
statement/prospectus (when they become available) and other
documents that are filed or will be filed with the SEC by Spirit or
Boeing through the SEC's website at https://www.sec.gov.
Copies of documents filed with the SEC by Spirit will be available
free of charge through Spirit's website at
https://investor.spiritaero.com/corporate-profile/default.aspx.
Copies of documents filed with the SEC by Boeing will be available
free of charge through Boeing's website at
www.boeing.com/investors. The information included on, or
accessible through, Boeing's or Spirit's website is not
incorporated by reference into this press release.
Participants in the Solicitation
Spirit and its directors and certain of Spirit's executive
officers and other employees, and Boeing and certain of its
directors, executive officers and other employees, may be deemed to
be participants in the solicitation of proxies from Spirit's
stockholders in connection with the proposed transaction between
Spirit and Boeing. A description of participants' direct or
indirect interests, by security holdings or otherwise, will be
included in the proxy statement/prospectus relating to the proposed
transaction when it is filed with the SEC. Information regarding
Spirit's directors and executive officers is contained in the
"Proposal 1 – Election of Directors," "Corporate Governance,"
"Director Compensation," "Stock Ownership" and "Compensation
Discussion and Analysis" sections of Spirit's definitive proxy
statement for its 2024 annual meeting of stockholders, filed with
the SEC on March 12, 2024, under the
heading "Executive Officers of the Registrant" in Part I of
Spirit's Annual Report on Form 10‑K for the fiscal year ended
December 31, 2023, filed with the SEC
on February 22, 2024, in Item 5.07 of
Spirit's Current Report on Form 8-K filed with the SEC on
April 29, 2024, and in Spirit's
Current Report on Form 8‑K filed with the SEC on June 5, 2024. Information regarding Boeing's
directors and executive officers is contained in the "Proxy Summary
– Leadership Changes," "Election of Directors (Item 1)," "Corporate
Governance," "Compensation Discussion and Analysis," "Compensation
of Executive Officers" and "Stock Ownership Information" sections
of the definitive proxy statement for Boeing's 2024 annual meeting
of shareholders, filed with the SEC on April
5, 2024, in Item 10 of Boeing's Annual Report on Form 10‑K
for the fiscal year ended December 31,
2023, filed with the SEC on January
31, 2024, in Boeing's Current Reports on Form 8‑K filed with
the SEC on December 11, 2023,
March 25, 2024, and May 17, 2024, and in Boeing's February 22, 2024 press release, available on
Boeing's investor relations website at
www.boeing.com/investors, relating to the appointment of a
new Chief Human Resources Officer. Additional information regarding
ownership of Spirit's securities by its directors and executive
officers and of Boeing's securities by its directors and executive
officers is included in such persons' SEC filings on Forms 3 and 4.
These documents and the other SEC filings described in this
paragraph may be obtained free of charge as described above under
the heading "Important Information and Where to Find It."
Certain Labor Matters
The binding term sheet with Airbus (the "Airbus Term Sheet")
provides that no binding agreement has been made with respect to
the French aspects of the transactions contemplated under the
Airbus Term Sheet (the "Airbus French Transactions"). Prior to the
Company and Airbus and its affiliates entering into definitive
agreements that are applicable to the Airbus French Transactions,
the Operating Company and Airbus have agreed to comply with their
respective information and consultation obligations with applicable
employees and employee representatives. The Airbus Term Sheet also
provides that the parties will complete necessary labor
consultations and obtain necessary approvals from applicable unions
and works councils in various jurisdictions, as may be legally
required.
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