The U.S. Federal Trade Commission (FTC) has officially approved Boeing’s plan to acquire aerospace supply giant Spirit AeroSystems. Under the FTC’s conditional approval, Boeing will have to divest numerous Spirit operations related to Airbus programmes. Boeing states that the step was expected for the company and aims to finalise the acquisition before year-end.
Approval Process Opened to 30-Day Public Comment
Documents published on 3 December indicate that Boeing signed the required conditions on 21 November. The FTC opened its decision to a 30-day public comment period, but Boeing announced that the “decision does not delay the merger process” and that it may close the transaction before the comment period ends, if necessary.
The company stated:
“The FTC decision does not delay Boeing’s planned merger close. The divestiture requirements were as expected.”
Airbus Operations to Be Divested to Protect Competition
The FTC explained the main justification for its approval as follows:
“This consent order will preserve competition in the markets for large commercial and military aircraft, which are critical to U.S. commercial air travel and national security.”
The commission assessed that Airbus’s access to critical components could be at risk if Boeing acquired Spirit, and therefore required the divestiture of important Airbus lines.
Under the agreement, Boeing must divest the following operations within 10 days after closing:
- Airbus A220 pylon production line
- Spirit’s Airbus-related units in Belfast
- Airbus production lines at Spirit’s Kinston (USA/North Carolina), St. Nazaire (France), Morocco and Prestwick (Scotland) facilities
- Spirit’s Subang (Malaysia) operation
Airbus agreed to acquire the relevant assets, while the Subang facility will be purchased by Composite Technology Research Malaysia.
Scope of Spirit Operations: A220, A320neo and A350 Parts
Spirit AeroSystems manufactures various critical components for Airbus programmes:
- Prestwick: A320neo and A350 wing parts
- Belfast (former Short Brothers): A220 wings, mid-fuselage sections and business jet fuselage parts
- Kinston & St Nazaire: A350 fuselage sections
- Casablanca: A321 and A220 components
- Wichita: A220 pylon production
- Subang: Components for Airbus and Boeing jets
Boeing announced that it will retain the non-Airbus sections of the Belfast facility.
Boeing: “We Welcome the Approval”
Boeing stated that it welcomed the FTC’s decision, adding:
“The acquisition is not yet fully complete, but we remain committed to taking the remaining steps necessary to close the transaction.”
The company announced last year its plan to acquire Spirit AeroSystems through a $4.7 billion stock swap. This move is known to aim at increasing Boeing’s control over its supply chain and resolving Spirit’s long-standing operational issues.
Spirit plays a strategic role for Boeing by producing 737 fuselages and critical aerostructures for numerous commercial and military aircraft. Production disruptions caused by quality issues have long been a major concern for Boeing.
A New Turning Point for the Industry
Boeing summarised the ultimate goal of the acquisition as follows:
“This milestone will further strengthen our ability to build safe and high-quality airplanes for our customers.”
The acquisition of Spirit AeroSystems by Boeing is expected to have significant implications for the stability of the global aviation supply chain.
