📉Boeing to acquire Spirit Aero for $4.7 billion, Tesla cars added to Chinese government's purchase list and more.
Hello, dear readers! ☀️We hope you had a great week. Here's your weekly update on the latest news from finance and markets.
On Monday, Boeing announced plans to purchase Spirit AeroSystems in a $4.7 billion all-stock deal after months of negotiations, aiming to address a significant corporate and industrial crisis. GE Aerospace announced it has extended CEO Larry Culp's tenure until the end of 2027, with a possible one-year extension. Shari Redstone's National Amusements has reached a preliminary agreement to sell its controlling interest in Paramount Global to David Ellison's Skydance Media for $1.75 billion. General Motors will pay a $145.8 million penalty and forfeit credits worth hundreds of millions of dollars after a U.S. government investigation found excess emissions from about 5.9 million GM vehicles. Tesla's popular Model Y is now on a list of electric and plug-in hybrid vehicles that a local government in China can purchase as service cars, reported official Chinese media on Thursday.
Stay tuned for more updates in the dynamic world of finance and markets! 🌟
Boeing to acquire Spirit Aero for $4.7 billion after prolonged negotiations
On Monday, Boeing announced plans to purchase Spirit AeroSystems in a $4.7 billion all-stock deal after months of negotiations, aiming to address a significant corporate and industrial crisis. The total deal value, including debt, is approximately $8.3 billion. Spirit's shares will be exchanged for 0.18 to 0.25 Boeing shares, valued at about $37.25 per share, as reported by Reuters. Spirit's shares closed at $32.87 on Friday. Separately, Airbus, also a Spirit customer, will take over core activities at four of Spirit's plants in the US, Northern Ireland, France, and Morocco, as well as minor operations in Wichita, Kansas. This follows Boeing's decision to reacquire its former subsidiary, which had expanded to supply Airbus and others since separating nearly two decades ago. Airbus sought up to $1 billion in compensation for taking over the plants producing parts for the A350 and A220 jets, but will receive $559 million from Spirit and pay Spirit a symbolic $1 for the assets. Spirit also plans to sell its operations in Prestwick, Scotland, Subang, Malaysia, and non-Airbus-supporting operations in Belfast, Northern Ireland. Boeing expects the Spirit deal to close by mid-2025.
GE Aerospace extends CEO Culp's contract to 2027
GE Aerospace announced it has extended CEO Larry Culp's tenure until the end of 2027, with a possible one-year extension. This decision follows reports that Culp declined an offer to join Boeing as its chief. Culp, 61, became GE Aerospace's CEO in October 2018, the first outsider to hold the position, taking over during a time of weak margins and significant debt. He navigated the company through the pandemic's impact on air travel and oversaw the split of the conglomerate into three separate companies in 2024. Under his leadership, GE's debt decreased by over $100 billion, cash flow quadrupled, and market cap grew by about $100 billion. Culp's contract, initially set to end on August 17, now extends to December 31, 2027.
Skydance to acquire majority stake in Paramount
Shari Redstone's National Amusements has reached a preliminary agreement to sell its controlling interest in Paramount Global to David Ellison's Skydance Media for $1.75 billion, sources told Reuters on Tuesday. National Amusements owns 77% of Paramount's voting shares. The deal includes a 45-day "go-shop" period for other potential bidders, including Steven Paul, Edgar Bronfman Jr., and Barry Diller, to submit offers. A special committee of Paramount's board will review the deal. The sale is part of a two-phase plan where Skydance would eventually merge with Paramount.
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GM to pay a $145.8 million penalty for excess emissions!
General Motors will pay a $145.8 million penalty and forfeit credits worth hundreds of millions of dollars after a U.S. government investigation found excess emissions from about 5.9 million GM vehicles, officials announced on Wednesday. The Environmental Protection Agency (EPA) stated that GM will surrender approximately 50 million metric tons in carbon allowances after the investigation revealed that vehicles from the 2012-2018 model years emitted over 10% more carbon dioxide than reported. Additionally, the National Highway Traffic Safety Administration (NHTSA) announced GM will pay a $145.8 million fine for fuel economy compliance issues and cancel over 30.6 million fuel economy credits for the 2008-2010 model years. GM disclosed it was negotiating with regulators about credit adjustments, estimating total costs at $450 million, including forfeited credits valued at about $300 million. GM confirmed this estimate aligns with the final resolution costs and stated it has complied with all applicable laws and regulations.
Tesla cars added to Chinese government's purchase list for the first time!
Tesla's popular Model Y is now on a list of electric and plug-in hybrid vehicles that a local government in China can purchase as service cars, reported official Chinese media on Thursday. This marks the first time Tesla's cars are eligible for government purchases in China. The eastern Jiangsu provincial government published 56 batches of new energy vehicle procurements for use by party, government, and public organizations on June 6. Neither the government nor the media specified the number of cars that could be bought. Tesla's cars were previously banned from some government and military compounds in China but restrictions were lifted after an endorsement from the country's top auto industry association in April, confirming compliance with data collection regulations. Despite Tesla's deliveries of China-made vehicles falling 9% in the first half of 2024 compared to 2023, CEO Elon Musk's visit to China in late April to meet Premier Li Qiang seems to have had a positive impact. China has increased its support for Tesla, which plans to build a data training center and introduce its Full Self-Driving software in the country this year, despite ongoing US-China tech tensions.
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