Boeing: Spirit Aero Systems Deal Makes Good Sense; Fair Value Estimates Unchanged

Boeing will take over Spirit Aero Systems later in 2024, exchanging between .18 and .25 shares of its stock per outstanding share of Spirit Aero, depending on the market price of Boeing shares in the weeks preceding the deal's closing. Their agreement values Spirit Aero at $37.25 per share, a $6.25 premium to our fair value estimate. We see the price as justifiable on two grounds: 1) as an all-stock deal, Spirit shareholders may warrant some compensation for interim uncertainty about the value of the currency they are accepting; 2) but more importantly, Spirit will be worth more as part of Boeing than as a standalone enterprise.