For Release
FTC Requires Boeing to Divest Several Spirit Assets to Proceed with Merger
FTC takes action to protect competition in the military and commercial aircraft markets
The Federal Trade Commission will require The Boeing Company (Boeing) to divest significant Spirit AeroSystems Holdings, Inc. (Spirit) assets to resolve antitrust concerns surrounding Boeing’s $8.3 billion acquisition of Spirit.
The FTC’s proposed order will protect competition in the large commercial and military aircraft markets, which are critical to American commercial travelers and national security.
“American commercial travelers and our military deserve to fly on dependable aircraft, manufactured with reliable components,” said David J. Shaw, Principal Deputy Director of the FTC’s Bureau of Competition. “The Trump-Vance FTC’s action today protects aircraft manufacturing competition to ensure that Americans across the country can continue to access high-quality aircraft to reach their next destination.”
The proposed merger seeks to combine Boeing, one of the world’s largest manufacturers of commercial and military aircraft, with Spirit, the world’s largest independent supplier of aerostructures, such as fuselages and wings, which are critical structural components of both commercial and military aircraft.
Under a proposed consent order, Boeing will divest:
- Key Spirit businesses that currently supply aerostructures to Airbus SE (Airbus), including all necessary assets and personnel. These assets will be divested to Airbus.
- Boeing will also divest Spirit’s Subang, Malaysia aerostructures business that currently supplies aerostructures to Boeing and Airbus. Spirit’s Subang business will be divested to Composites Technology Research Malaysia Sdn. Bhd (CTRM).
The divestitures resolve FTC allegations that Boeing’s acquisition of Spirit would give Boeing the ability and incentive to raise the cost or degrade Airbus’ access to inputs for its competing aircraft. The FTC’s proposed order requires Boeing to provide transitional services to Airbus and CTRM to assist them in manufacturing various products. The FTC has also appointed a monitor to oversee the divestitures and ensure that both Boeing and Spirit comply with the divestiture order.
The FTC’s order also requires Boeing and Spirit to continue to provide aerostructures and aerostructure services to competing contractors for military aircraft programs. Spirit is required to continue its existing contracts with other contractors and continue to be available as a supplier for future competitors. It also cannot discriminate in favor of Boeing in its dealing with other competing military aircraft companies and must protect those companies’ confidential information.
The FTC alleged that without these requirements, Boeing would have the ability and incentive to deny or limit competitors’ access to Spirit’s aerostructure products and technologies, inhibiting competitors’ ability to compete against Boeing. Boeing could also gain access to sensitive proprietary information relating to its competitors and exploit it to its own advantage, the complaint further alleges.
FTC staff cooperated closely with staff of the competition agencies in the European Union and United Kingdom, and with the staff of the U.S. Department of War (DoW) to analyze the proposed acquisition and potential remedies. The Commission especially appreciates the collaborative relationship between DoW and FTC staff to assess the impact of the transaction on national security and the defense industrial base.
The Commission vote to issue the complaint and accept the consent agreement for public comment was 2-0.
The public will have 30 days to submit comments on the proposed consent agreement package. Instructions for filing comments appear on the docket. Once processed, they will be posted on Regulations.gov.
NOTE: The Commission issues an administrative complaint when it has “reason to believe” that the law has been or is being violated, and it appears to the Commission that a proceeding is in the public interest. When the Commission issues a consent order on a final basis, it carries the force of law with respect to future actions.
The Federal Trade Commission works to promote competition, and to protect and educate consumers. The FTC will never demand money, make threats, tell you to transfer money, or promise you a prize. You can learn more about how competition benefits consumers, file an antitrust complaint, or comment on a proposed merger. For the latest news and resources, follow the FTC on social media, subscribe to press releases, and read our blog.