Spirit AeroSystems is putting on hold a $650 million deal that would give it more work on military aircraft and commercial jetliners.
Wichita’s largest employer said Friday it is postponing the deal to acquire the parent company of Asco Industries in Belgium because of issues identified during a review of the acquisition by the European Commission.
Spirit didn’t specify what the issues are. Analysts could press the company for more details when Spirit hosts a conference call next Wednesday to discuss its third quarter 2018 earnings.
“Spirit has decided to withdraw its notification of the transaction from the Commission in order to address those issues,” the supplier to Airbus and Boeing said in a news release. “This will interrupt the Commission’s current review of the transaction. Spirit and Asco will work to refile the notification in a timely manner.”
“Spirit remains confident that the transaction will be completed and remains enthusiastic about the strategic fit of Asco with the rest of its operations.”
A little over a month ago Spirit CEO Tom Gentile said U.S. regulators had approved the deal and the European review was underway. “We still expect that to close this year,” Gentile said on Sept. 12 at the Morgan Stanley Laguna Conference for investors.
He said the acquisition would be especially beneficial and timely for the company as it adjusts to Boeing’s higher commercial aircraft production rates.
“As we’ve gone up in rate, one of the things that we’ve seen is that processing, whether it’s chemical treatment or heat treatment . . . there’s a bit of a shortage in the market,” Gentile said. “And Asco have some very good processing capabilities, so we’ll immediately leverage that.”
“So, we’ve got plans in place that we can immediately take advantage of their machining capacity, their processing capacity, and ensure a smooth integration.”
Spirit announced the deal with S.R.I.F. N.V. in May, adding that it would give it new work on Lockheed’s F-35 Joint Strike Fighter and Airbus’ A320 and A350 airliners.
Asco has 1,400 employees working at sites in Belgium, Brazil, France and Germany as well as in Vancouver, Canada; Seattle; and Stillwater, Okla.