UK competition regulators have launched an initial investigation into Boeing’s planned acquisition of aerostructures supplier Spirit AeroSystems.
The Competition & Markets Authority had on 26 June announced that it was seeking comments on the transaction with a deadline of 15 July but stopped short of starting a formal inquiry.
But the CMA now says it has notified both parties that it has commenced a ‘phase 1’ investigation into the deal.
A phase 1 inquiry is an initial review of the merger, assessing whether it has a realistic prospect of substantially lessening competition, the threshold for a more in-depth ‘phase 2’ probe.
It has set a deadline of 28 August to make a decision on whether to refer the merger for a phase 2 inquiry. At that point, the businesses could propose remedies to head off the second step.
A phase 2 investigation lasts for at least 28 weeks but could be extended by another eight.
Although the bulk of Spirit’s operations are in the USA it also owns two sites in the UK: Prestwick in Scotland and Belfast in Northern Ireland.
Boeing had been aiming to complete the acquisition by mid-year, with a date of 1 July tentatively mooted.
It had agreed to buy the troubled business last year as means of improving quality and improving the resilience of its supply chain; Spirit is one of the Boeing’s largest suppliers, building key parts of the 737 Max and 787.
But the transaction has been complicated by Airbus’s involvement: it is taking over parts of Spirit’s operation that produce structures for its programmes.
This includes the bulk of work in Belfast, which builds wings for the A220. However, Boeing will be left with the rump of activity at the site, chiefly making parts for Bombardier business jets.
