On Monday, Goldman Sachs maintained its Buy rating on Boeing (NYSE:BA) shares with a $243 price target. Boeing has entered into a definitive agreement to purchase Spirit AeroSystems (NYSE:SPR) in an all-stock deal, aimed at enhancing long-term value by integrating commercial production systems and optimizing resources.
The $4.7 billion transaction, which includes net debt, bringing the total value to $8.3 billion, is anticipated to close by mid-2025, contingent on regulatory and Spirit AeroSystems stockholder approvals, along with the completion of asset sales to Airbus.
The acquisition is part of Boeing's strategy to bolster product quality, addressing issues linked to aerostructure components and internal system coordination with Spirit. This move is set to bring together Boeing and Spirit AeroSystems after nearly two decades of operating separately. The transaction values Spirit AeroSystems at roughly 8.0 times its estimated 2025 EBITDA.
As part of the deal, Spirit AeroSystems has also agreed to a binding term sheet with Airbus for the potential sale of major activities related to Airbus, with Airbus receiving $559 million from Spirit as compensation. Furthermore, Spirit plans to divest certain operations in Subang, Malaysia, Prestwick, Scotland, and Belfast, Northern Ireland, excluding those that support Airbus programs. The proceeds from these divestitures may help offset the payment to Airbus.
Goldman Sachs' endorsement of Boeing's stock reflects confidence in the aerospace giant's long-term prospects, particularly in light of the proposed acquisition of Spirit AeroSystems. The firm's analysis suggests that the merger could resolve past issues and streamline Boeing's production capabilities to meet future demand.
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