The Boeing Company acquired McDonnell Douglas Corporation for $16.3 billion (all-stock; each McDonnell Douglas share converted into 1.3 Boeing shares under a fixed exchange ratio), a transaction completed in August 1997, structured as All stock; fixed exchange ratio of 1.3 Boeing shares per McDonnell Douglas share, accounted for as a pooling of interests and treated as a tax-free reorganization. West Acquisition Corp., a Boeing subsidiary, merged into McDonnell Douglas, which survived as a wholly owned subsidiary of Boeing.. The deal was a Merger.
McDonnell Douglas Corporation operates in Commercial airplanes & defense/space, is based in St. Louis, Missouri (McDonnell Douglas headquarters). Boeing merged with McDonnell Douglas, the defense and commercial-aircraft maker behind the F/A-18, F-15, C-17, Delta rockets and the MD-80/MD-90 airliner lines, in one of the largest aerospace combinations in history. The transaction, valued at $16.3 billion, combined Boeing's commercial-jet leadership with McDonnell Douglas's military-aircraft and space franchises and reshaped the global aerospace and defense landscape.
Boeing pursued scale and a broader defense/space portfolio as the U.S. aerospace industry consolidated in the mid-1990s; the combined company would have Boeing directors constituting two-thirds of the board, with Philip Condit as Chairman and CEO.
A leading U.S. defense-aircraft and space company whose military franchise balanced Boeing's commercial-jet cyclicality. McDonnell Douglas survived as a wholly owned Boeing subsidiary and was integrated across Boeing's commercial and defense/space units.
Advisory firms were not disclosed for this transaction.