Spirit AeroSystems has negotiated a 7% discount on the price to acquire Belgian aircraft component maker Asco, securing new terms to reflect lengthy delays resulting partly from regulatory holdups.
Wichita-based Spirit will now pay $604 million to acquire Asco, down from an originally negotiated $650 million, says Spirit chief executive Tom Gentile.
The deal will now close by the end of June, he says during Spirit’s first quarter earnings call on 1 May.
“The closing process has been longer and more costly than we originally anticipated,” Gentile says. “Accordingly, Spirit and Asco have negotiated a 7% purchase price reduction… due to the incremental acquisition costs and the business impact from the delayed closing.”
Spirit initially expected to close the Asco purchase by the second half of 2018, but Spirit’s acquisition proposal faced regulatory scrutiny.
Gentile now says Spirit is nearly complete with acquisition-related work required by the European Commission, which approved the deal earlier this year with conditions related to a Belgian aerospace consortium called Belairbus.
Spirit is “segregating data that Asco had access to as part of the Belairbus structure,” says Gentile.
“Once we identify that data and treat it consistent with the commission’s requirements, we will be in a position to close the deal,” he adds. “That work is well underway and should be competed in the next few weeks.”
The Commission held up the acquisition due to concern it would hinder competition among supplies of aircraft slat systems. Spirit makes slats, and so does Belgium’s Sonaca.
Both Asco and Sonaca are members of Belairbus, and regulators feared Spirit would use Belairbus to coordinate their slats businesses to the detriment of competition, according to regulatory documents.
In March, the commission cleared the acquisition after Spirit agreed that Belairbus will not negotiate contracts directly with Airbus. Rather, those negotiations will flow through Belairbus’s individual members, regulatory documents show.
Spirit has described the Asco acquisition as a means to secure more Airbus work and to expand its defense and fabrications businesses.