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IMMEDIATE RELEASE

Release No: 351-97
July 01, 1997

DOD FINDS BOEING'S ACQUISITION OF MCDONNELL DOUGLAS ACCEPTABLE

Deputy Secretary of Defense John P. White today advised the Federal Trade Commission that the proposed acquisition of McDonnell Douglas Corporation by the Boeing Company is acceptable to the Department of Defense.

In a letter to the Chairman of the FTC, White noted that the Department conducted a comprehensive review of the transaction and its effect on defense programs. Based on DoD's review of the proposed transaction, he concluded, "DoD will maintain competition for its purchases."

The Department carefully examined ongoing and anticipated programs where the two companies compete or can be expected to compete. The Department also examined the markets where these two companies are likely to be defense suppliers and determined that the transaction would not create excessive market concentration.

The Department's review reflects the priority it places on maintaining competition for DoD programs, and it also demonstrates the Department's continued support for the restructuring of the defense industry. During its review, DoD staff worked closely with the FTC staff. In his letter, White praised the continued cooperation between the two agencies.

A copy of Deputy Secretary White's letter is attached.


DEPUTY SECRETARY OF DEFENSE

1010 DEFENSE PENTAGON WASHINGTON, DC 20301-1010

  • Honorable Roberi Pitofsky
  • Chairinan, Federal Trade Commission
  • 6th Street & Pennsylvania Avenue, NW
  • Washington, DC 20580

Dear Mr. Chairman:

The Department of Defense has completed a comprehensive review of the proposed acquisition of McDonnell Douglas Corporation by The Boeing Company.

During our review, we carefully examined the Department's ongoing and anticipated programs, including related program acquisition strategies, in which the two companies compete or can be expected to compete. We also examined the markets in which these two companies are or are likely to be defense suppliers, focusing particularly on those markets in which Boeing and McDonnell Douglas are major competitors, such as fighter aircraft and expendable launch vehicles.

Based on our review of the proposed transaction, we conclude that DoD will maintain competition for its purchases. Accordingly, the Department of Defense raises no objection to the acquisition of McDonnell Douglas Corporation by The Boeing Company.

I appreciate the continued cooperation that has taken place between the Federal Trade Commission and the Department of Defense during our respective assessments of the transaction. From our point of view, the public interest was well-served by the cooperation between our respective staffs.

Sincerely,

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