08:47 AM EDT, 06/21/2024 (MT Newswires) -- (Adds deal details in fourth and sixth paragraph)

Boeing ( BA ) is close to buying back its former subsidiary Spirit AeroSystems ( SPR ) following the struggling supplier's notable progress in separate talks with European rival Airbus, Reuters reported Thursday, citing people familiar with the matter.

The company started discussions earlier this year to acquire Spirit to stabilize its supply chain after a mid-air blowout on a new 737 MAX in January. Airbus initially threatened to block any deal that involved Boeing ( BA ) building parts for its newest models, according to Reuters.

Subsequently, Boeing ( BA ) and Airbus have broadly divided Spirit's programs into work that each company will take back, with a third category of programs that may be sold or dealt with separately, one of the sources said.

The deal could see Airbus acquire Spirit's Belfast unit that produces wings for its A220 model and the Kinston, North Carolina, and Saint Nazaire, France facilities that supply critical components for the advanced A350 widebody, according to the report.

The deal could come within days or weeks but the exact timing is uncertain, the anonymous sources said.

The report added that the final terms of the deal are still under negotiation, and the agreement could change or fall apart.

Airbus is seeing "good progress" in talks with Spirit and a deal over Spirit's Airbus-related assets is expected before the European group's mid-year earnings in July, according to the sources.

Boeing ( BA ) said it is buying back Spirit to maintain the safety and quality of its jets, after blaming Spirit for sending incomplete or faulty parts to its factories, while sources said the January blowout rekindled Boeing's ( BA ) earlier interest in the supplier due to concerns over Spirit's financial condition and the need to invest in digital production systems, according to Reuters.

Meanwhile, an Airbus spokesperson said that the company is in talks with Spirit to protect the sourcing of its programs and to define a more sustainable way forward.

Boeing ( BA ) declined MT Newswires' request for comment on the matter, while Spirit and Airbus did not immediately respond.

(Market Chatter news is derived from conversations with market professionals globally. This information is believed to be from reliable sources but may include rumor and speculation. Accuracy is not guaranteed.)

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