SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported) July 23, 1997
McDonnell Douglas Corporation
Exact name of Registrant as Specified in Charter
Maryland 1-3685 43-0400674
(State or Other Jurisdiction (Commission (IRS Employer
of Incorporation) File Number) Identification No.)
Post Office Box 516, St. Louis, Missouri 63166-0516
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code (314) 232-0232
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INFORMATION TO BE INCLUDED IN THE REPORT
Item 5. Other Events.
On July 23, 1997, the proposed merger between a subsidiary of The Boeing
Company and McDonnell Douglas Corporation received a positive opinion from the
European Commission, following the acceptance by The Boeing Company of certain
conditions designed to address the European Commission's concerns regarding the
merger.
A copy of the press release issued by The Boeing Company on July 23, 1997
with respect to receipt of the European Commission's positive opinion is
attached hereto as Exhibit 99 and is incorporated herein by reference.
EXHIBIT
Exhibit No.
99 Press Release
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
McDonnell Douglas Corporation
(Registrant)
/s/ Steven N. Frank
July 23, 1997 By: -----------------------------------------
(Date) Steven N. Frank
Vice President, Associate General Counsel
and Secretary
BOEING-MDCONNELL DOUGLAS MERGER GAINS A POSITIVE
OPINION FROM THE EUROPEAN COMMISSION
SEATTLE, July 23 - The merger of Boeing and McDonnell Douglas (NYSE:MD)
today received a positive opinion from the European Commission (EC) in Brussels.
Final approval by the EC is expected at the Commission's meeting scheduled for
July 30. "This is a significant step toward completing the merger of these two
great aerospace companies," said Boeing Chairman and Chief Executive Officer
Phil Condit.
As a condition of clearance by the EC, Boeing agreed to certain conditions
to address Commission concerns regarding the merger. "By agreeing to the
European Commission's conditions, we took the action we believed was in the best
long-term interests of our shareholders, customers, our suppliers and the more
than 200,000 employees of Boeing and McDonnell Douglas," Condit added.
To address the Commission's concerns regarding potential spillover of
benefits from the McDonnell Douglas defense business to the Boeing commercial
airplane business, Boeing agreed to license patents obtained under U.S.
government-funded contracts to commercial aircraft manufacturers on a
non-exclusive, reasonable-royalty basis; to cross-license blocking patents to
commercial aircraft manufacturers on a non-exclusive, reasonable-royalty basis;
and to supply for a period of 10 years an annual report to the European
Commission on its current unexpired patents arising from government-funding
contracts and on its non-classified government-funded aeronautics research and
development projects. Boeing also agreed to not unduly interfere with actual or
potential relationships between its suppliers and other commercial aircraft
manufacturers.
In response to the Commission's concerns regarding the acquisition of the
McDonnell Douglas commercial aircraft business, Boeing -- which intends to
provide customer support for existing McDonnell Douglas commercial aircraft at
the same high-quality level provided for Boeing aircraft -- agreed not to
leverage such customer support to obtain any advantage in sales of new
commercial aircraft. Boeing also agreed to maintain McDonnell Douglas'
commercial aircraft business in a separate legal entity for 10 years and to
supply an annual report to the European Commission on the business activities of
such commercial aircraft business.
Boeing agreed not to enter into any new "exclusive" supplier agreements
with commercial aircraft purchasers until Aug. 1, 2007, except where another
aircraft manufacturer has offered such an agreement. Finally, although Boeing
questions whether the company's "exclusive" agreements with its U.S. customers
should be the subject of demands by the European Commission, to secure merger
approval Boeing further agreed not to enforce the exclusivity provisions in its
existing agreements with American Airlines, Delta Airlines and Continental
Airlines. The agreements remain otherwise unaffected.
Boeing believes that the European Commission should have given greater
deference to the U. S. Federal Trade Commission, which has prime jurisdiction
over the merger and which had examined the same facts in its six-month
investigation, during which Boeing and McDonnell Douglas submitted more than 5
million pages of documents and the FTC interviewed representatives from more
than 40 airlines, as well as other industry participants. On July 1, the FTC
approved the merger without conditions.
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"Had we proceeded without the approval of the European Commission, we would
have potentially faced large fines and potential harm to our customers," said
Condit. "Had we chosen to delay the merger, the resulting uncertainty would
have potentially damaged our customers, suppliers, employees and shareholders."
Shareholders from both Boeing and McDonnell Douglas will vote on the merger
Friday, July 25, in separate shareholder meetings in Seattle and St. Louis.
Subject to formal EC approval, as well as shareholder approval, the closing
of the transaction is expected on Friday, Aug. 1, with the companies beginning
joint operations as the new Boeing Company on Monday, Aug. 4.
Contact: For International Media: Jerry Hendln/In Brussels
(32 2) 779-2312
For U.S. Media: Sherry Nebel (206) 655-6123
http://www.boeing.com
