Arconic announced Monday it's signed its largest ever contract to supply aluminum sheet and plate products for Boeing.
The contract will add volume to the production at the Davenport Works plant. The deal draws on Arconic's latest aerospace manufacturing technology, a thick plate stretcher, which was installed at the local plant last year, according to company officials.
News of the contract follows a Wall Street Journal report Friday that private-equity firms, including Apollo Global Management, are interested in buying Arconic. Shares of Arconic surged around 10.5 percent to $19.20 per share Monday, after a year of plunging shares due to leadership changes, threats of steel and aluminum tariffs, plus higher commodity prices.
The multi-year deal, which extends and adds to the companies' 2014 contract, is the largest to date and intended to capture growth in the build rate increases of the Boeing 737 program. It builds on the companies' agreement for wing skins on all of its metallic structure airplanes, plus includes polished fuselage skins and wing ribs, according to the news release.
In addition, Boeing awarded Arconic new business for the supply of structural plate used on a variety of other applications, including wing ribs for carbon fiber platforms, such as the 787 and 777X.
And the contract takes advantage of Davenport Works' new thick plate stretcher, which is capable of stretching the thickest aluminum plate in the world, according to the news release. Combined with its new horizontal heat treat furnace, which is expected to begin qualifications in 2019, Arconic will have more capacity in thick plate products.
"One of the challenges composite wing makers face as the wings get larger is maintaining their structural strength and stiffness," a company official said. "Aluminum plate from Arconic's stretcher enables aircraft manufacturers to address that issue. As a result, demand for thick aluminum plate is growing, particularly as larger composite wings, made with monolithic thick plate wing ribs, increases."
Under the agreement, the companies will continue to collaborate on new, high-strength and corrosion-resistant alloys, including aluminum-lithium that could be used for complex structural applications, according to the news release.
"This agreement demonstrates Arconic's commitment to deliver quality and innovation to our customers," said Tim Myers, president of Arconic Global Rolled Products and Transportation and Construction Solutions. "We're proud of our more than 40 years of collaboration with Boeing, and we look forward to playing a role in their continued success."
Financial terms were not disclosed Monday.
Arconic's aerospace business had revenues totaling more than $5 billion in 2017, according to the company.
The Associated Press contributed to this story.