Boeing in talks to buy supplier Spirit AeroSystems, WSJ reports

(Reuters) -Boeing Co is in talks to buy former subsidiary Spirit AeroSystems, as both companies grapple with a series of quality problems surrounding 737 MAX jets, the Wall Street Journal reported on Friday.

Spirit, which was spun off from the U.S. planemaker in 2005, has hired bankers to explore strategic options and has had preliminary discussions with Boeing, the Journal reported, citing people familiar with the matter.

Boeing and Spirit declined to comment. Reuters could not immediately verify the report.

Spirit, one of the industry's major manufacturers of large aircraft structures, has struggled with cash flow problems over the past few quarters and quality issues surrounding the fuselages it makes for Boeing's 737 narrowbody jets.

The company's shares have lost more than 70% of their value over the last five years, according to LSEG data.

Shares of Spirit jumped 16.2% on Friday, while those of Boeing fell 1%.

Boeing had considered buying Spirit Aerosystems back on multiple occasions over the years since divesting it, but the optics of buying at a higher price were among the factors that discouraged such a move, according to an industry source familiar with the matter.

Spirit is also exploring selling operations in Ireland that make parts for Airbus, according to the report. Spirit's market cap stood at $3.3 billion as of Thursday's close, according to LSEG data.

Boeing and Spirit, which builds the entire 737 fuselage, are under scrutiny from investors, regulators and lawmakers after a door plug detached from a 737 MAX 9 in flight in early January.

The latest quality lapse has turned into a reputational crisis for Boeing, which postponed providing a financial forecast for 2024 when it reported quarterly results in January.

Shortly after the accident, the U.S. Federal Aviation Administration barred Boeing from expanding production of its cash-cow 737 MAX family of jets without giving any details on when it would lift the restrictions.

Wichita, Kansas-based Spirit in October named former Boeing and Pentagon official Patrick Shanahan as its interim CEO, replacing Tom Gentile.

In the same month, Spirit reached an agreement with Boeing under which the supplier received immediate funding from the planemaker and revised prices for 737 and 787 production.

(Reporting by Abhijith Ganapavaram and Shivansh Tiwary in Bengaluru; Editing by Anil D'Silva)