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Boeing/McDonnell cleared
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July 1, 1997: 4:02 p.m. ET
As expected, FTC approves merger of the aerospace firms in $14B deal
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NEW YORK (CNNfn) - The Federal Trade Commission approved a $14 billion merger Tuesday between Boeing Co. and McDonnell Douglas Corp. that will create the world's largest aerospace firm.
"The merger seems to pose no threat to the competitive landscape in either the commercial aircraft or in various defense markets," commissioners said in a statement.
But the commissioners said they were "troubled" by recent news that Boeing signed 20-year exclusive contracts with three major airlines.
Boeing and McDonnell hailed the ruling after the FTC's exhaustive review of more than 5 million documents.
"We are deeply gratified that the (FTC) has given unconditional approval to the Boeing/McDonnell Douglas merger," said Phil Condit, Boeing's chief executive, in a joint statement.
Said Harry Stonecipher, chief executive of McDonnell, "We are delighted with the FTC decision and look forward to bringing these two great companies together."
The FTC said McDonnell no longer is a competitive force in the commercial aircraft market. The two companies also haven't been competitors for military contracts.
The panel denied it cleared the way for the merger to create a "national champion," so the United States could better compete in the global market, as some critics argued. Commissioners said they have no authority to approve mergers to bolster U.S. trade interests.
"The 'national champion' argument is almost certainly a delusion," commissioners said.
The decision Tuesday followed one of the FTC's most exhaustive investigations. The merger will create an aerospace giant with more than 200,000 employees and annual sales projected at $40 billion.
Both companies scheduled shareholder meetings for July 25, and the new entity, called Boeing Co., will begin operations Aug. 4.
The merger also faces a review on July 31 by European regulators, who have leveled several criticisms of the deal. 
-- Martine Costello
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