DEFM14A: Boeing to Acquire Spirit AeroSystems in All-Stock Deal Valued at $37.25 Per Share

Spirit AeroSystems stockholders will vote on a proposed merger agreement with Boeing, where Spirit would become a wholly-owned subsidiary of Boeing in an all-stock transaction.

Summary

• Spirit AeroSystems entered into a merger agreement with Boeing on June 30, 2024, making Spirit a wholly-owned subsidiary of Boeing.
• Spirit stockholders will receive Boeing common stock, with the exchange ratio depending on Boeing's stock price.
• If Boeing's stock price is between $149.00 and $206.94, the exchange ratio will be $37.25 divided by Boeing's stock price.
• If Boeing's stock price is greater than or equal to $206.94, the exchange ratio will be 0.1800.
• If Boeing's stock price is equal to or less than $149.00, the exchange ratio will be 0.2500.
• The implied value of the per share merger consideration would be $37.25 if Boeing's stock price is between $149.00 and $206.94.
• The special meeting for Spirit stockholders to vote on the merger is scheduled for January 31, 2025.
• The Spirit Board unanimously recommends that stockholders vote in favor of the merger agreement.
• The merger is expected to be completed in mid-2025, subject to regulatory approvals and other conditions.

Sentiment

Score: 7

Explanation: The document is largely factual and descriptive, outlining the terms and conditions of the merger. The Spirit Board recommends the merger, suggesting a positive outlook, but the document also acknowledges potential risks and uncertainties.

Positives

• The Spirit Board believes the merger is in the best interests of Spirit and its stockholders.
• Stockholders will receive shares in a larger, more diversified company.
• The merger is expected to generate synergies and improve supply chain stability.
• The exchange ratio includes a collar, providing some protection against fluctuations in Boeing's stock price.

Negatives

• Spirit stockholders will have a reduced ownership percentage in the combined company.
• The value of the merger consideration is subject to fluctuations in Boeing's stock price.
• The merger is subject to regulatory approvals, which may impose conditions or delay completion.
• The merger could be delayed or prevented if certain conditions are not met.
• The market price of Boeing Common Stock may be volatile following the Merger.

Risks

• The market prices of Boeing and Spirit stock will fluctuate prior to the completion of the Merger, Spirit Stockholders cannot be sure of the market value of shares of Boeing Common Stock that they will receive in the Merger.
• The Merger is subject to conditions, including certain conditions that are beyond Boeings and Spirits control and may not be satisfied on a timely basis or at all.
• Failure to complete the Merger could have material adverse effects on Boeing and Spirit.
• The Merger is subject to certain regulatory approvals that, if delayed, not granted or granted with burdensome or unacceptable conditions, could delay, impair or prevent completion of the Merger or result in additional costs or reduce the anticipated benefits of the Merger.
• Spirit may not be able to complete the disposition of the Spirit Airbus Business.
• The Merger Agreement limits Spirits abilities to pursue alternatives to the Merger and could discourage a potential competing acquiror or other strategic transaction partner from making a favorable alternative transaction proposal.
• The Merger, and uncertainty regarding the Merger, may adversely affect Boeings and Spirits relationships with customers, suppliers, strategic partners and others and could adversely affect each companys ability to effectively manage its respective business.
• Uncertainties associated with the Merger may result in a loss of management and other key personnel of Boeing or Spirit, which could adversely affect the future business and operations of the combined company following the Merger or the business of Boeing or Spirit should the Merger not be completed.
• The Merger might be completed even if material adverse changes, such as industry-wide changes or other events, subsequent to the announcement of the Merger were to occur.
• Boeing and Spirit are expected to incur significant transaction costs in connection with the Merger, which may be in excess of those anticipated by them.
• Spirit Stockholders will not be entitled to appraisal rights in the Merger.
• Completion of the Merger may trigger change in control or other provisions in certain agreements to which Spirit or any of its subsidiaries or joint ventures is a party.
• Boeing and Spirit may be a target of securities class action and derivative lawsuits, which could result in substantial costs and could delay or prevent the completion of the Merger.
• Current Boeing Stockholders and current Spirit Stockholders will have a reduced share of ownership in the combined company.
• Spirits directors and executive officers have interests in the Merger that may be different from, or in addition to, the interests of Spirit Stockholders generally.
• Boeing and Spirit may waive one or more of the conditions to the Closing without resoliciting stockholder approval of the Merger Agreement Proposal and may terminate the Merger Agreement even if it has been adopted by Spirit Stockholders.
• The market price for Boeing Common Stock following the Closing may be affected by factors different from those that historically have affected or currently affect Boeing Common Stock and Spirit Common Stock.
• Following completion of the Merger, the market price of Boeing Common Stock may be volatile, and holders of Boeing Common Stock could lose a significant portion of their investment due to drops in the market price of Boeing Common Stock following completion of the Merger.
• If the Merger is completed, Boeing may not achieve the anticipated benefits of the Merger, including anticipated synergies.
• The combined company may not be able to retain Boeing and Spirits existing customers, which could have an adverse effect on the combined companys business and operations, and third parties may terminate or alter existing contracts or relationships with Boeing or Spirit.
• The combined company may be exposed to increased litigation, which could have an adverse effect on the combined companys business, financial position, results of operations and cash flows.
• If the Merger does not qualify as reorganization under Section 368(a) of the Internal Revenue Code of 1986, as amended, Spirit Stockholders may be required to pay substantial U.S. federal income taxes.
• The financial forecasts are based on various assumptions that may not be realized.
• The opinion of Spirits financial advisor will not reflect changes in circumstances between the signing of the Merger Agreement and the completion of the Merger.
• After the Merger is completed, Spirit Stockholders will have their rights as stockholders governed by Boeings organizational documents.
• Some of our and our suppliers workforces are represented by labor unions. Work stoppages by our employees have adversely affected and could continue to adversely affect our business, financial condition, results of operations and/or cash flows. Future work stoppages by our or our suppliers employees could also adversely impact our business.

Future Outlook

Boeing and Spirit expect to complete the merger in mid-2025, subject to regulatory approvals and other conditions.

Management Comments

• The Spirit Board has unanimously determined that the merger agreement is in the best interests of Spirit and its stockholders.
• The Spirit Board unanimously recommends that the Spirit Stockholders vote FOR the Merger Agreement Proposal, FOR the Advisory Compensation Proposal and FOR the Adjournment Proposal.

Industry Context

The merger aims to integrate Boeing's and Spirit's operations, potentially improving safety, quality, and supply chain stability in the aerospace industry.

Comparison to Industry Standards

• The document does not provide a direct comparison to industry standards.
• However, it mentions that Moelis & Company considered publicly traded companies in the aerospace and defense sector when evaluating the fairness of the deal.
• The document also notes that aerostructures businesses supplying structural components to aircraft OEMs are typically viewed as having lower trading multiples from a valuation perspective than other portions of the aerospace supply chain.

Legal Proceedings

• One lawsuit has been filed by a purported Spirit Stockholder against Spirit and the Spirit Board alleging certain purported deficiencies in the registration statement on Form S-4 of which this proxy statement/prospectus forms a part, and Spirit has received letters from additional purported Spirit Stockholders including similar allegations.

Related Party Transactions

• Boeing is the largest customer of Spirit, accounting for approximately 64% of Spirit's net revenues for the 12 months ended December 31, 2023.
• Boeing has made advance payments to Spirit, including under the April 18, 2024 memorandum of agreement and the November 8, 2024 advance payments agreement.

Stakeholder Impact

• Spirit Stockholders will receive Boeing Common Stock in exchange for their Spirit Common Stock.
• Boeing Stockholders will have a reduced ownership percentage in the combined company.
• The merger may affect relationships with customers, suppliers, and employees of both companies.

Next Steps

• Spirit Stockholders will vote on the Merger Agreement Proposal, the Advisory Compensation Proposal and the Adjournment Proposal at the Special Meeting on January 31, 2025.
• Boeing and Spirit will seek regulatory approvals for the merger.
• The parties will work to satisfy the conditions to closing outlined in the Merger Agreement.
• If all conditions are met, the merger is expected to close in mid-2025.

Key Dates

Keywords

Merger Agreement, Spirit AeroSystems, Boeing, Stockholders, Merger, Acquisition, Exchange Ratio, Regulatory Approvals