Airbus agrees to pay $1 for Spirit AeroSystems assets in deal sparked by Boeing 737 Max blowout

Pete Syme
Updated ·2 min read
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Airbus agrees to pay $1 for Spirit AeroSystems assets in deal sparked by Boeing 737 Max blowout

  • Airbus has agreed to acquire assets of Spirit AeroSystems for $1.

  • Airbus said it would also be compensated with $559 million from the aviation manufacturer.

  • Boeing is buying the bulk of Spirit in the wake of the Alaska Airlines blowout.

Airbus has agreed to buy assets of a major aviation supplier for a symbolic $1 price tag, the planemaker announced Monday.

Spirit AeroSystems, which was part of Boeing before it was spun off in 2005, is being carved up following January's Alaska Airlines blowout.

The companies announced on Monday that Boeing would pay $4.7 billion to buy back Spirit AeroSystems.

However, the deal also requires Airbus' involvement because Spirit supplied the European planemaker with several key parts.

Airbus said it entered a binding term-sheet agreement to acquire the production of "major activities related to Airbus," including building fuselage sections for the A350 and the pylons, wings, and mid-fuselage for A220 jets.

Plus, Airbus said it would be compensated with $559 million from Spirit AeroSystems.

This isn't the first time Airbus has picked up assets on the cheap. The A220 began life as the Bombardier CSeries, but in 2018, after the CSeries program ran into financial issues, Airbus bought a 50% stake for 1 Canadian dollar. The stake was later raised to 75% in a $591 million deal.

Spirit built the fuselage of the Alaska 737 Max that lost its door plug in midair and sparked a crisis at Boeing. Weeks after the incident, Boeing began negotiations to buy back the firm in an attempt to improve its quality-control processes.

In a preliminary report, the National Transportation Safety Board said Spirit sent the plane to Boeing's factory with damaged rivets. The report said the door plug was then opened to solve this, but it wasn't bolted back into place before the plane was delivered to Alaska Airlines.

In the fallout, Boeing CEO Dave Calhoun announced his resignation. The Justice Department is also considering criminal charges against Boeing, which could be announced this week.

Read the original article on Business Insider