Archer Aviation shares jump nearly 10% on deal to acquire Boeing’s Wisk, two other units

Archer Aviation's shares surged nearly 10% on Monday following the company's announcement to acquire Boeing's electric aircraft business, Wisk Aero, along with two other units. In exchange, Archer Aviation received a nearly 20% stake in the deal. The stock opened at $6.41 and traded between $6.08 and $6.87 throughout the session, reaching a peak of 14% in morning trading.

The acquisition includes drone manufacturer Insitu and airspace-services provider SkyGrid, which will provide Archer access to Boeing's autonomous-flight technology. This move could strengthen Archer's position in defense and commercial logistics applications. Boeing, in return, will obtain a 19.75% stake in Archer and appoint a director to its board. The aerospace giant will also retain the right to utilize Wisk's technology for its commercial and defense aircraft programs.

For Boeing, these divestments are part of a broader strategy to streamline its portfolio and refocus on its core commercial aircraft and defense businesses, ultimately reducing its investment in air-taxi ventures. Archer Aviation, which has yet to generate significant revenue from its core business, will acquire Insitu, a profitable defense company with annual revenue exceeding $200 million.

Archer Aviation's CEO, Adam Goldstein, expressed optimism regarding the deal, stating that it would enable the company to "start generating significant revenue immediately in a major growth market." He further highlighted the growing demand for intelligence, surveillance, and reconnaissance drones, anticipating this as a significant opportunity for an already revenue-generating and cash-flow-positive business.

However, it is important to note that the electric vertical take-off and landing, or eVTOL, industry has yet to prove that air taxis can achieve large-scale production and operate at affordable prices for mainstream customers, as commercial launches have taken longer than initially expected.