Boeing deal set for take off

Date: 24/07/1997

US PLANE manufacturer Boeing this week agreed last-minute concessions to salvage its take-over of McDonnell Douglas after the European Commission stuck by its threat to block the deal.

The Commission is expected to clear the take-over officially next Wednesday (July 30) now that Commissioners have agreed in principle that they should no longer stand in the way of the 10-billion-ecu deal.

Brinkmanship between the Commission and Boeing raised transatlantic tensions and threatened to sour relations if the EU grounded the deal. US competition watchdog, the Federal Trade Commission, had already said it should go ahead.

Boeing's decision to drop a series of exclusive agreements to supply American Airlines, Delta Airlines, and Continental Airlines with aircraft for 20 years clinched the Commission's late change of heart.

The world's biggest aircraft producer had already gone some way to meet Commission demands by giving guarantees that it would allow rival manufacturers access to some of its know-how in return for royalty payments and would maintain an arm's length relationship with McDonnell Douglas for at least ten years.