Landon Capital

Spirit shares rise as Boeing agrees to buy supplier for $4.7 bln in all stock deal.– Boeing Co (NYSE:BA) has reached an agreement to reacquire Spirit AeroSystems Holdings Inc (NYSE: SPR) for over $4 billion, ending months of speculation over the deal as the plane maker struggled with a new safety crisis, the two companies said on Monday.

Boeing will pay $37.25 for each share in Spirit in an all-stock deal, Spirit said in a press release, valuing the aircraft parts maker at $4.7 billion. Including debt, the deal will come up to a total transaction value of $8.3 billion.

“Bringing Spirit and Boeing together will enable greater integration of both companies’ manufacturing and engineering capabilities, including safety and quality systems,” Spirit CEO Patrick M. Shanahan said.

Spirit shares rose more than 5% in premarket trading Monday, while Boeing fell 1.3%.

The deal will see the break-up of Spirit, with some of its assets going to French plane maker Airbus Group SE (EPA: AIR), over antitrust concerns. Spirit said it will divest operations in Malaysia, Scotland, and Northern Ireland as part of the deal.

“We would expect it will take 6-12 months for the deal to close,” Barclays analysts commented on the news.

“We ultimately expect having SPR under its control to be beneficial to BA’s ability to ramp higher, although it could weigh over the near term given the resources that will need to be diverted to improve SPR’s Wichita manufacturing. Increased vertical integration with SPR will ultimately make BA more cyclical and more capital-intensive,” they added.

Meanwhile, Bank of America analysts said that while the latest news removes some uncertainty, concerns remain regarding the deal’s regulatory clearance.