Boeing and Mcdonnell Douglas Merger

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Boeing and Airbus; two longtime rivals fighting over market share in an extremely volatile market due to high research and development costs and constant changes in market demand was the cause for Boeing to take drastic protective measures. Boeing which at the time was one of the largest commercial aircraft manufacturer and third largest aerospace defense contractor decided to merge with McDonnell Douglas. McDonnell Douglas also produces commercial aircraft but held much less of the market share than Boeing. The intent of this paper is to describe the search and screening process Boeing used which is broken down in to three categories: legal, financial and operational, discuss the valuation criteria, analyze the negotiation and bidding…show more content…
Rolinitis (1997) “The merged company will have approximately 200,000 employees which included the recent Boeing merger of Rockwell aerospace and defense units. It will operate with estimated 1997 revenues in excess of $48 billion, making it the largest integrated aerospace company in the world” (The Deal).
Valuation Criteria
The air craft production industry is one of the most volatile industries due to ever changing supply and demand and high research and development costs. As the air craft market changed moving towards more commercial demand and declining defense demand, it became in the best interest for Boeing and McDonnell Douglas to merge into one joint company making them the largest commercial and defense air craft production company. There can be quite a bit of issues concerning the merger of two companies; some concern what is in the best interest of one company and others may include the concern of not violating trade laws. The purpose of this paper was to describe the search and screen process and issues; specifically legal, financial, and operational status, discuss the valuation criteria, valuation and negotiation and bidding processes of the merger between McDonnell Douglas and Boeing.
Andrews, E. L. (1997). Boeing Concession Averts Trade War With Eurpe. The New York Times. Retrieved from

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