The Federal Trade Commission has cleared Boeing’s acquisition of supplier Spirit AeroSystems, clearing the way for the merger to move forward.

Boeing’s $4.7 billion acquisition of Spirit has been pending since June 2024, when the manufacturer announced it would fold the troubled supplier back into its company after spinning Spirit out 20 years ago.

The FTC decision Wednesday came with some stipulations to ensure the merger does not affect Boeing’s commercial and military competitors. Boeing, Spirit and European manufacturer Airbus, Boeing’s largest rival in the commercial aerospace market, had already planned to take those actions, which include divesting parts of Spirit to Airbus to ensure the supplier can still design and build components for both plane makers.

Spirit, based in Wichita, Kan., is crucial to Boeing’s business. It makes the forward fuselage for every Boeing commercial plane, the entire fuselage for the 737 MAX, and wings, engine nacelles and pylons for Boeing products. For years, the supplier has faced allegations of lax production standards and manufacturing defects, while it struggled to turn a profit. The total value of the acquisition is estimated to be $8.3 billion, with Boeing taking on Spirit’s debt.

The European Union’s antitrust division signed off on the acquisition in October, after Boeing agreed to similar terms to divest the parts of Spirit’s business that supply aircraft components to Airbus.

Boeing and Spirit expect the acquisition will be finalized this year, with the FTC’s approval marking another step forward.

The FTC filed a complaint on Dec. 2 alleging the acquisition could be anti-competitive and, a day later, announced a proposed order to allow the merger to move forward. There is now a 30-day window for public comment. The acquisition could still close during that period.

The “action today protects aircraft manufacturing competition to ensure that Americans across the country can continue to access high-quality aircraft to reach their next destination,” David J. Shaw, the principal deputy director of the FTC’s Bureau of Competition, said in a statement Wednesday.

A Boeing spokesperson said the company welcomes the FTC’s approval and is committed to taking the necessary steps to finalize the acquisition.

“This milestone will further enhance our ability to manufacture safe, high-quality airplanes for our customers and benefit the flying public,” the spokesperson said.

In its complaint outlining anti-competitive concerns, the FTC argued the acquisition could provide Boeing an unfair advantage in the already-limited commercial and military aircraft markets. Boeing and Airbus account for 95% of commercial aircraft deliveries, the FTC said, while Boeing is one of only three companies able to supply military aircraft to the U.S. government.

In the U.S. military market, Boeing is competing domestically with just Lockheed Martin and Northrop Grumman to provide fixed-wing military aircraft, and Lockheed Martin and Bell Textron for rotor-wing aircraft, the FTC said.

It would be “extremely difficult and costly” for a new company to establish the necessary expertise and specialized facilities to compete with Boeing and its current rivals, the FTC said.

Spirit, meanwhile, is the largest global supplier of aerospace structures, including fuselages, wings, pylons and other critical components. That means Boeing’s rivals, particularly Airbus, don’t have many options beyond Spirit. Finding alternatives would be difficult, expensive, time-consuming and risky, the FTC argued.

The acquisition, then, could give Boeing the “ability and incentive” to harm its commercial competitors by denying aerospace parts, degrading their quality or worsening the terms of sale, the FTC concluded.

It could do the same for its military competitors, which could then lead other defense contractors to raise their prices, decide not to compete for government programs or “invest less aggressively” in future development, the FTC continued. That could increase costs for the U.S. government and hamper innovation.

“The effects of the Acquisition, if consummated, may be to substantially lessen competition or to tend to create a monopoly,” the FTC wrote in its complaint.

To resolve its concerns, the FTC required Boeing to divest the parts of Spirit’s business that supply aircraft parts to Airbus, as well as Spirit’s business in Malaysia, which supplies parts to both Boeing and Airbus.

The companies agreed last year that Boeing and Airbus would slice up Spirit so that each manufacturer would control the Spirit units that produce components for their planes. While Boeing is buying Spirit, Airbus won’t pay to acquire its parts of the business. In fact, Spirit will pay Airbus $439 million, according to an agreement reached in April.

Spirit’s financial troubles are due in part to the terms of deals set with its two main customers. Spirit lost money on most Airbus products, due to the manufacturer’s low pricing for its own customers. Boeing, meanwhile, spent years squeezing the supplier to cut costs, part of its broader strategy to pressure all suppliers to reduce expenses. Both Boeing and Airbus have in recent years pumped money into Spirit to help aid its recovery.

The FTC’s order also required Boeing to provide transitional services to Airbus and Composites Technology Research Malaysia, which is acquiring Spirit’s business there. It appointed a monitor to oversee the divestitures.

On the military side, the order required Spirit to continue providing aircraft structures to competing defense contractors. It also forbade Spirit from discriminating in favor of Boeing and said the supplier must protect competing companies’ confidential information.

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