Yahoo FinanceHow jetmakers divided up struggling supplier Spirit AeroSystems

By Mike Stone, Tim Hepher and Abhijith Ganapavaram
WASHINGTON (Reuters) - Hashed out in three-way talks between plane giants and one of their key suppliers, Boeing's $4.7 billion deal to buy back Spirit AeroSystems is a rare triangular deal born out of crisis.
The merger, variously code-named "Sphere" and "Sparrow," had been in the making since at least September when Boeing was offering financial support and commercial agreements to help Spirit improve operations, people familiar with the talks said.
But last year's efforts to improve Spirit's quality and delivery issues, a persistent problem for some years, reached a tipping point on Jan. 5, when an Alaska Airlines jet lost a panel in mid-flight, freezing output of the affected model.
The incident, linked to bolts going missing in a Boeing plant after unidentified workers addressed flaws in a fuselage shipped from Wichita, Kansas, accelerated discussions between Boeing and Spirit despite tensions - and within days led to deeper talks.
"They had to deal with the problems on the ground first, but then within a week there were formal discussions between Spirit and Boeing about a potential transaction," a person familiar with the deal said.
On March 1, Boeing confirmed the talks, catching markets and Spirit's other key customer, Europe's Airbus, by surprise.
Boeing had sold off Kansas and Oklahoma plants for around $950 million to private equity firm Onex in 2005 to meet targets for returns on net assets. Since then, Spirit had diversified to find new clients. The results included a 500,000-square-foot Airbus A350 composite-fuselage parts plant in North Carolina.
But as production failed to take off as planned, costs were high, driving the new operations into the red and raising questions over the resilience of the world's largest standalone aerostructures firm, analysts said.
Europe's top planemaker had itself been in talks for months with Spirit to help it improve the efficiency of loss-making operations that supply its modern A220 and A350 jetliners.
Forced to rewrite its approach after Boeing revealed its bid plans, Airbus quickly drew a red line around two key plants: the purpose-built factory in Kinston, North Carolina, where rail-mounted robots weave part of the composite body of the A350, and an A220 wings facility in a plant in Belfast, Northern Ireland.
At stake was access to data about costs and strategic decisions about production for its most modern programs.
In an interview with Reuters in April, Airbus CEO Guillaume Faury conceded the planemaker was likely to absorb those plants but warned that it reserved the right to use a contractual veto to prevent the sensitive work from falling into the hands of industry rivals.