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The U.K.’s competition watchdog has launched a formal investigation into Boeing’s (NYSE:BA) planned acquisition of Spirit AeroSystems (NYSE:SPR), raising fresh regulatory obstacles for a deal aimed at improving the aerospace giant’s manufacturing quality and safety.
The Competition and Markets Authority (CMA) said it initiated a preliminary review of the $4.7 billion transaction last week to evaluate its potential impact on competition within the U.K. The regulator has now advanced the process to a formal Phase 1 inquiry, with a decision expected by August 28 on whether to proceed to a deeper, Phase 2 investigation.
Boeing (NYSE:BA) announced plans to acquire Spirit AeroSystems (NYSE:SPR) in July 2024, in a deal encompassing the majority of Spirit’s Boeing-related commercial operations, along with its defense, aftermarket, and other commercial activities. Boeing (BA) executives have argued that regaining control of Spirit (SPR), originally spun off from Boeing (BA) nearly 20 years ago, would help address persistent manufacturing and quality issues.
Spirit (SPR) has been tied to several high-profile quality concerns, notably involving the 737 MAX program. The company’s Wichita, Kansas facility produced the fuselage involved in the widely publicized door-panel failure on an Alaska Airlines jet last year.
The U.K. probe adds to a series of regulatory checks that Boeing faces as it seeks to stabilize its troubled supply chain by bringing Spirit’s operations back under its umbrella.
Supply chain disruptions have plagued the aviation sector since the COVID-19 pandemic, with parts shortages ranging from engines to fuselage sections causing delays in aircraft production across the industry.
Spirit’s manufacturing difficulties have hampered Boeing’s production rates for years, contributing to broader assembly delays and quality concerns.
Airbus (OTCPK:EADSF) (OTCPK:EADSY), Boeing’s (BA) main European competitor, has also been impacted by Spirit-related (SPR) supply chain issues. Earlier this year, Airbus CEO Guillaume Faury cited Spirit as one of several bottlenecks affecting output of the A220 and A350 aircraft lines. These challenges have already forced Airbus to push back the expected entry into service of its A350 freighter variant from 2026 to the second half of 2027.
In a parallel move, Airbus has reached its own agreement to take over Spirit operations tied to Airbus aircraft production across facilities in the U.S., Europe, and Africa, as part of efforts to exert more direct oversight of critical components.