Boeing will buy supplier Spirit AeroSystems for $4.7 billion. Meanwhile, the Justice Department reportedly plans to charge the Dow Jones aerospace giant with fraud, urging Boeing to plead guilty to the criminal charge.
Boeing stock and Spirit Aero rose modestly Monday.
Boeing Agrees To Buy Spirit AeroSystems
Boeing has agreed to buy Spirit AeroSystems for $37.25 a share, or $4.7 billion, in an all-stock deal. It'll also assume $3.5 billion in debt. The Dow giant aims to have more control over its supply chain amid recent safety lapses.
Justice To Charge Boeing With Fraud
The floated plea deal would involve a fine as well as an independent monitor for Boeing's safety and compliance practices. Boeing will have until the end of the week to respond.
A criminal guilty plea could complicate Boeing's government contracts.
Specifically, the DOJ is accusing Boeing of violating a 2021 settlement after the fatal 737 Max crashes in 2018-2019 that killed 346 people. That deferred-prosecution agreement, forged in the final days of the Trump administration, let Boeing avoid criminal prosecution if it followed certain conditions.
In May, Justice officials concluded that Boeing had failed to live up to that 2021 settlement by failing to implement an effective compliance program to detect and prevent fraud violations.
That followed renewed Boeing safety concerns after part of the fuselage blew off a 737 Max 9 jet during an Alaska Airlines flight. Safety investigators determined key bolts were missing, leading to the discovery of other lapses at Boeing and key supplier Spirit Aero.
Boeing Stock
Boeing stock rose 2.6% to 186.70 on Monday, with the DOJ action and Spirit Aero deal not huge surprises. Shares rose 3.1% last week to 102.01, rallying from a 52-week low in late April. But BA stock is still down 28% in 2024, one of the worst performers on the Dow Jones and S&P 500.
Spirit AeroSystems popped 3.35% to 33.97. Shares fell 2.1% to 32.87 last week, but after soaring 14.3% in the prior week. SPR stock is up 7% in 2024.
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