(23 Jul 1997) English/Nat
The merger of aerospace giants Boeing and McDonnell Douglas moved a step closer on Wednesday with the European Union withdrawing its opposition to the plan.
Europe’s endorsement of the 15 (b) billion dollar merger averts a potential trade war with the United States after last-minute concessions by Boeing and lobbying by the Clinton administration and Congress.
At a crowded news conference in Washington, Boeing and McDonnell Douglas executives publicly welcomed the news from Europe.
Although preliminary approval was issued on Wednesday, formal approval from the European Commission should be granted next week.
SOUNDBITE: (English)
"Overall I think we are very comfortable with the kind of agreements we reached and it gives us a position to go ahead. So with that we are anticipating finding approval in a week from the European Commission when the final vote is taken and that I think will clear the way for the merger, and Harry said we will both have stockholders meetings this Friday. We expect again approval by our shareholders to proceed, and that will allow us to close on August first and begin operations as a single company, August fourth."
SUPER CAPTION: Phil Condit, Boeing Chairman
As part of the negotiations, Boeing agreed to loosen its hold on exclusive US airline contracts, easing European concern that the new airplane giant would hurt Airbus Industries.
Until Tuesday, when Boeing faxed its concessions to EU headquarters, the Commission had been expected to reject the deal.
Such a ruling would have excluded the merged company from the 15-nation EU market and left it open to fines of up to four (b) billion dollars.
It could also have provoked a transatlantic trade war.
Boeing chief executive Phil Condit rejected claims that the company had completely folded to pressure from the European Union.
SOUNDBITE: (English)
"This was a negotiation, no question about it. We did not arrive with identical views otherwise there would not have been a negotiation, we just would have agreed and gone on. I think both sides in that process. As I said one of the issues initially was divestiture of Douglas. We thought that that would be extremely disadvantageous both to our customers and to the fourteen thousand people that make up Douglas aircraft. We reached an agreement which we think was very positive. There’s give and take on both side and in this case. I think that both sides did what you do in a negotiation, which is make some compromises and meet in the middle."
SUPER CAPTION: Phil Condit, Boeing Chairman
Other concessions by Boeing included a pledge to allow competitors to pay for access to certain aviation technology patents and to keep McDonnell Douglas’s civil aircraft arm, Douglas Aircraft, as a separate legal entity for 10 years.
Shareholders of both companies vote Friday on the merger and if they give the expected go-ahead, the merger is set to start August 4th.
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