The Emerging Role of the European Commission in Merger and Acquisition Monitoring: The Boeing / Mcdonnell Douglas Case #61623
27 Pages Posted: 7 Aug 2000
On December 21, 1989 the European Community Counsel promulgated EEC regulation no. 4064/89 and in doing so, reinforced merger operations monitoring and control at the European level. The object of this study is to evaluate the consequences of the application of this regulation to non-European companies with merger and acquisition operations under way. It is an illustration of how the parts played by the different monitoring authorities at the world level are interwoven and of the complexity of the legal and political environments peculiar to multinational firms. We focus on the Boeing ? McDonnell Douglas case because it is one of the first non-European mergers considered by the Commission. The analysis of abnormal returns on the two securities shows that the threat of a ban of the merger by the Commission where not perceived as credible at first. But when Boeing decided to request the support of the American government, just after the decision of the European Commission to extend its investigations to the long term exclusivity contacts, the role of the Commission emerged.
Keywords: mergers and acquisitions, regulation costs, concentration control, event studies
JEL Classification: G34
Suggested Citation: Suggested Citation