Boeing Co. gained the European Commission's clearance to complete its planned takeover of Spirit AeroSystems, a $4.7-billion deal the OEM negotiated last year. To secure the approval, Boeing has committed to divest all Spirit operations that supply aerostructures to Airbus, as well as a Malaysian operation that supplies Airbus and others with composite components.
The Commission is the European Union’s executive branch, responsible for reviewing and authorizing major political and commercial decisions..
Spirit AeroSystems manufactures airframe structures for multiple OEMs, but it is a critical supplier to Boeing’s 737 MAX and 787 Dreamliner programs. Normalizing and optimizing the supplier relationship is considered critical to Boeing’s long-term success.
“Boeing’s commitments will preserve competition in this crucial market and enable the entry of a new rival, and ensure commercial aircraft makers get the parts they need at competitive prices,” according to a statement by Teresa Ribera, the top antitrust official for the European Commission.
The EC, which has regulatory authority across the European Union, had raised anti-trust concerns over those assets in Boeing’s initial filing. It explained that the Boeing-Spirit combination would have the means, and the incentive, to cut off competitors like Airbus, “or at least deteriorate the supply conditions”.
It also speculated that the combined business could gain access to, and then take advantage of, commercially sensitive information about Airbus.
“The Commission had concerns that the transaction, as initially notified, would have significantly reduced competition in the global markets for aerostructures and large commercial aircraft. Spirit primarily manufactures and supplies aerostructures for large commercial aircraft. These aerostructures are used as input by manufacturers and suppliers of large commercial aircraft, such as Boeing and Airbus SE,” according to the EC’s statement.
Those objections prompted Boeing to submit a revised proposal in September, including the divestitures.
Boeing and Airbus previously negotiated terms for separating various Spirit Aero assets.
The takeover was endorsed by U.K. regulators in August, but has not been approved by the U.S. Federal Trade Commission.
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Robert Brooks
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Robert Brooks has been a business-to-business reporter, writer, editor, and columnist for more than 20 years, specializing in the primary metal and basic manufacturing industries.