Select Page

Boeing Co., one of the largest aerospace firms in the world is starting to pump the brakes as it pertains to its suppliers merging. Activity within this industry has been increasing lately, along with many other industries but Boeing, acting as the large buyer it is, has began to stymie the progression of some deals. By using the approval power they hold over contracts of suppliers they want to cool this activity spike off before major consolidation can continue.boeing aircraft

Well known investor Warren Buffett recently orchestrated a deal for Precision Castparts Corp, through his Berkshire Hathaway to the tune of $37 billion. If you are wondering why the investment mogul is paying large attention to this corner of the Aerospace market, the answer lies in the enormous backlog of Boeing production. Such a backlog means that Boeing will either be expanding their production effort or signing long term contracts for suppliers. Either way, there is money to be made for many companies in the industry, and they are looking to consolidate to meet the large producers demands.

Buffett’s acquisition of Castparts come after it had scooped up a number of smaller firms itself, including Exacta Aerospace, a machined parts, kits, and assemblies producer. As their supply chain grew, Boeing began to adjust to mitigate any type of supplier gaining too much power in their relationship.

Since this occurred with Precision Castparts they have been slowing down their supply chain from merging in order to protect their best interests. It seems merger and acquisition activity will continue to roll on as long as no outside forces have any large effect. The groundbreaking year of 2015 m&a continues.

To read the original article please see Biz Journals.