Following Wall Street Journal reports, Boeing (BA) has confirmed it is in talks to acquire Spirit AeroSystems (SPR). Yahoo Finance Live's Madison Mills breaks down the news.
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Editor's note: This article was written by Angel Smith, and updated by Luke Carberry Mogan.
Video Transcript
MADISON MILLS: Shares of Boeing and Spirit AeroSystems moving as we head into the close here. Boeing is down 1.5% almost. Spirit surging on the news up almost 14%.
This after news that Boeing is in talks to acquire the supplier Spirit AeroSystems. That news first reported by The Wall Street Journal. And, Julie, I know we've been talking about this today.
But I'm curious about whether this is an effort for Boeing to shore up their supply chain after the obvious challenges that they had with their aircraft following that door frame falling off. Spirit did build that airframe that had that door fly off mid-flight. But I'm very interested in what their thinking is on how viable of a strategy this is going to be moving forward.
JULIE HYMAN: I mean, there are a lot of questions about this, right. Because Spirit AeroSystems even before this latest trouble had sort of struggled financially. And Boeing as its former parent company, it spun it off in 2005, had to do some various cash infusions to try to shore it up as well.
So is the thinking that Boeing will have an easier time having it under its own umbrella? Of course, there are a lot of regulatory questions about all of this as well as we know. Boeing, as well as Spirit AeroSystems are each under regulatory scrutiny following that accident that you alluded to. So I just think there are a lot of questions about this.
MADISON MILLS: Right. A lot of questions but it does sound like-- I mean, Boeing does have some decent cash on hand like we were talking about I think to the tune of 16 billion-ish. So it's not nothing for them to be able to play around with.
