Boeing $BA ( ▲ 3.16% ) slipped on Wednesday after the FTC said its eight point three billion dollar plan to buy Spirit AeroSystems $SPR ( ▲ 0.23% ) cannot move forward unless Boeing agrees to carve out key Spirit assets.
According to the agency’s proposed order, Boeing would need to divest the Spirit units that supply wings, doors, and other aerostructures to Airbus $EADSY ( ▲ 1.27% ) . Those assets and the associated employees would be handed directly to Airbus to keep competition intact.
The FTC says the move is needed to avoid a situation where Boeing could raise costs on Airbus or choke off access to critical components. Regulators also argued that the merger could give Boeing visibility into sensitive competitor information since Spirit was originally spun out of Boeing in 2005 and still sits deep in the aircraft supply chain.
The public now has thirty days to comment on the proposal.