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Deal part of joint move with Boeing ( BA ) to rescue supplier

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Airbus to take over loss-making Europe-focused plants

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Deal closure expected in third quarter

(Adds analyst and shares, paragraphs 6-7, background, bullets)

By Allison Lampert, Kanjyik Ghosh and Tim Hepher

April 28 (Reuters) - Europe's Airbus has

finalised an agreement to take some assets from Spirit

AeroSystems ( SPR ), both companies said on Monday, completing a

critical part of a transatlantic carve-up of the struggling

supplier with U.S. rival Boeing ( BA ).

The U.S. planemaker agreed last year to buy back the world's

largest independent aerostructures supplier two decades after

spinning it off for $4.7 billion in stock, while Airbus moved to

take on its loss-making Europe-focused activities.

The unprecedented decision by competing plane giants to

prevent a collapse of the world's largest independent

aerostructures supplier follows years of financial pressure on

Spirit brought to a head by Boeing's ( BA ) recent 737 MAX crisis.

Two plants involved in the transfer to Airbus are Kinston,

North Carolina, where Spirit makes a crucial part of the A350

fuselage, and a plant in Belfast, Northern Ireland, that makes

carbon-fibre wings for the A220. Certain activities in Morocco

and France are also included.

Airbus said it would also acquire the production of wing

components for A320 and A350 jets in Prestwick, Scotland.

Under the deal, Airbus will be compensated for taking on the

loss-making production work by a payment of $439 million from

Spirit, though this is less than the $559 million originally

planned because of changes in the scope of the deal.

Jefferies analyst Chloe Lemarie said the new payment may not

fully offset a drag of mid-three-digit millions of euros that

Airbus expects on its 2025 cashflow from running the plants.

Even so, shares in the European planemaker rose around 2% as

the deal lifted uncertainty about a critical part of the supply

chain. Delays from Spirit have slowed A350 passenger jet

deliveries and contributed to a freighter development delay.

However, both companies said they expected the complex

three-way deal to close in the third quarter rather than

mid-year as previously indicated.

Airbus will meanwhile provide new interest-free credit lines

worth $200 million to Spirit, the companies said.

BELFAST JOBS

The deal leaves a question mark over part of the historic

former Short Brothers plant in Belfast, Northern Ireland's

largest manufacturing employer, which was sold first to Canada's

Bombardier then to Spirit and now to Airbus.

Britain's biggest union, Unite, has urged the country's

government to prevent a break-up of the Spirit operation that

employs 2,600 people in Northern Ireland.

Spirit said Airbus would acquire the production of A220

wings in Belfast. In the event a suitable buyer is not found,

Airbus would also take over production of the A220 mid-fuselage

there.

Besides supplying Airbus, Spirit's Belfast operation makes

parts for Bombardier private jets and carries out work in

defence and space. It lost $338 million in 2023.

Letters sent this month to employees from Boeing Commercial

Airplanes CEO Stephanie Pope and Spirit CEO Pat Shanahan suggest

that some of the non-Airbus work in Belfast could go to Boeing ( BA )

by default if no alternatives are found.

The decision to move ahead with plans to dismantle Spirit

and shore up its production lines comes as Boeing ( BA ) boosts

production of its 737 MAX cash cow following a series of crises

that weighed on output.

Spirit Aero, which produces the fuselage for the MAX, raised

doubts last year about its ability to continue as a going

concern, receiving financial help from both planemakers.

Airbus CFO Thomas Toepfer told shareholders earlier this

month the company expected to complete the agreement with Spirit

by the end of April and formally close the deal by June 30.