The Largest Merger in Aerospace Industry History: McDonnell Douglas and Boeing in 1997

In August of 1997, Mconnell Douglas merged with Boeing to create the world’s largest integrated aerospace company. The Boeing Company, which had been the world’s largest in commercial aircraft manufacturing, bought McDonnell Douglas Corporation in a stock swap worth $13.3 billion. Along with Boeing’s 1996 acquisition of Rockwell International Corp.’s aerospace and defense unit, this move further bolstered Boeing’s ventures into the military defense sphere.

Although in decline after its exclusion from the Defense Department’s 1996 Joint Strike Fighter (JSF) competition, McDonnell Douglas was still one of the nation’s dominant defense suppliers, having created some of the industry’s most successful fighter aircrafts. McDonnell Douglas’s F-15 Eagle has a thrust greater than the weight of the fully loaded plane and has flown with Israeli, Japanese, Saudi Arabian, and South Korean air forces. As of June 2004, this fighter retained a perfect combat record with 101 victories and no defeats. The F/A-18 Hornet was built for the U.S. Navy and Marine Corps and in 1986 was chosen to perform for the Navy’s Blue Angels demonstration squadron.

The McDonnell Douglas/Boeing merger was unique in a number of ways. At the time it was the 10th largest merger in American history and placed Boeing as the sole manufacturer of commercial aircrafts in the United States. In 1993, with the conclusion of the Cold War, the U.S. government halved the size of its military procurement budget in a meeting known as “The Last Supper”. This set off a wave of aerospace industrial consolidation in the 1990s. Thirty-two American defense companies became nine. Boeing’s focus on commercial aircrafts complemented McDonnell Douglas’s established presence in military contracting to create a civilian/military partnership of considerable scale and breadth. The U.S. government allowed the merger in order to better compete with Europe’s Airbus consortium thus heralding a new era of aircraft manufacturing as a competition among nations, with Boeing as the leading American aerospace firm and only Lockheed Martin as the next primary contender. Although involved in a variety of endeavors (including capital financing and travel services), Boeing remains primarily recognized for its Commercial Airplanes and secondly for its Defense, Space, & Security (BDS) divisions. In 2013, the company reported $86.623 billion in sales and ranked 30th on the Fortune 500. The Boeing Company world’s foremost aerospace and defense firm currently maintains its status. ASAP Semiconductor distributes spare parts for current Boeing platforms and stocks a number of obsolete items as well. Please contact sales@asapsemi.com for more information.