Airbus finalizes binding contract with Spirit AeroSystems
Saturday, May 1, 2025 - Airbus Acquires Key Assets from Spirit AeroSystems in Strategic Shift
In a landmark move, Airbus (stock symbol: AIR) has locked down a deal with Spirit AeroSystems, securing a substantial portion of the latter's industrial assets dedicated to its commercial aircraft programs. This strategic acquisition aims to bring stability to Airbus' supply chain and establish control over crucial components for its commercial aircraft, such as the A320neo and A350.
The deal grants Airbus ownership of several key industrial sites housing essential components:
- Kinston, North Carolina, U.S. (A350 fuselage sections)
- St. Nazaire, France (A350 fuselage sections)
- Casablanca, Morocco (A321 and A220 components)
- Wichita, Kansas, U.S. (A220 pylon production)
- Belfast, Northern Ireland (A220 wing production) and (A220 mid-fuselage production)
- Prestwick, Scotland (wing components for A320 and A350)
Spirit AeroSystems plans to sell the site of Subang, Malaysia to a third-party owner.
With this deal's terms being refined, Airbus will cough up $439 million from Spirit AeroSystems, subject to certain adjustments at closing. The terms fall in sync with the provisional arrangement disclosed in the binding term sheet agreement announced on July 1, 2024.
The shifted transaction scope mirror's the EBIT Adjusted and Free Cash Flow before Customer Financing preliminary estimates outlined in Airbus' 2025 guidance, published on February 20, 2025.
The purpose of this acquisition is twofold:
- Supply Chain Resilience: Airbus has struggled with production delays caused by suppliers, like Spirit AeroSystems and Safran, that have hampered aircraft manufacturing output rates. By taking over these facilities, Airbus gains the upper hand in managing fuselage and wing production, mitigating supply chain disruptions and enhancing manufacturing quality and efficiency.
- Vertical Integration: With manufacturing processes under its command, Airbus can closely monitor operations, tighten quality standards, and streamline production to better align with its aircraft assembly lines.
This mission-critical acquisition also carves out a competitive edge for Airbus against rivals like Boeing, as they too wrestle with complex transactions with Spirit AeroSystems.
The deal's closure and official transfer of operations is earmarked for Q3 2025, contingent on regulatory and customary approvals.
Airbus has also penned a memorandum of agreement with Spirit AeroSystems, under which Airbus has agreed to provide Spirit AeroSystems non-interest-bearing lines of credit in the amount of $200 million to bolster Spirit AeroSystems' support on Airbus programs.
Sources:
- Airbus discloses terms of Spirit AeroSystems acquisition
- Airbus bolsters supply chain with Spirit AeroSystems deal
- Airbus' strategic acquisition of Spirit AeroSystems: A game-changer or a risky gamble?
- Why Airbus is buying Spirit AeroSystems: Painful lessons from Boeing's 787 program
- Airbus' deal with Spirit AeroSystems to boost aircraft production: Assessing operational, financial, and stock market implications
In the strategic acquisition, Airbus moves to consolidate control over vital components in the aerospace industry by taking ownership of key industrial sites from Spirit AeroSystems, aiming to bolster finance by improving efficiency and resilience in its supply chain. This acquisition is expected to provide Airbus with a competitive edge in the highly competitive aerospace industry, positioning the company to challenging rivals such as Boeing.
