Boeing in Talks to Buy Aerospace-Parts Maker Woodward - Update

02/08/18 10:58 AM EST
By Dana Mattioli, Bradley Hope and Doug Cameron 

Boeing Co. is in talks to buy aerospace parts maker Woodward Inc., according to people familiar with the matter.

The companies have held talks over the past several months, according to one of the people. Should there be a deal, it would be substantial. Woodward had a market value of about $4.8 billion on Thursday morning. Boeing, the world's largest aerospace company by revenue, was valued at $205 billion following a surge in its stock since 2016.

There is no guarantee, however, that the two sides will manage to strike a deal and one doesn't appear to be imminent.

The talks underscore the takeover appetite of Boeing, which also is trying to buy part or all of Embraer SA, the Brazilian maker of smaller commercial jetliners and business jets.

A deal with Woodward would further Boeing's effort to in-source more aircraft parts and cut costs to better compete with rival Airbus SE in a commercial-jetliner market worth an estimated $140 billion this year.

Boeing is pressing suppliers for better terms and also building more of its own parts, including cockpit systems and actuators, the motors that control wing flaps and other systems.

Woodward, based in Fort Collins, Colo., makes both of these products for commercial and military aircraft, as well as an array of other items including engine parts, pumps and valves. The company, which also has an industrial-machinery business focused on the energy and utility sectors, had sales of $2.1 billion in fiscal 2017.

It isn't clear what Boeing would do with this business, which had sales of around $750 million last year, if it bought Woodward.

 

(END) Dow Jones Newswires

February 08, 2018 10:58 ET (15:58 GMT)

Copyright (c) 2018 Dow Jones & Company, Inc.