Why did McDonnell Douglas merger with Boeing?

The firm supplied aircraft to the militaries to several allied nations. Countries such as the United States, the United Kingdom, Italy, Malaysia, and Japan all received planes from McDonnell Douglas. Ultimately, the deal would ramp-up Boeing's stance against rivals such as Lockheed Martin in military aviation.



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Most companies fail when customers do not buy their products. Douglas failed because customers did buy its products. Douglas fell with a successful innovative product, the DC-9, and an order backlog in excess of $3 billion and growing, enough work to keep its production lines humming for years.

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The Air Mail Act of 1934 prohibited airlines and manufacturers from being under the same corporate umbrella, so the company split into three smaller companies – Boeing Airplane Company, United Airlines, and United Aircraft Corporation, the precursor to United Technologies.

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Following Boeing's 1996 acquisition of Rockwell's North American division, McDonnell Douglas merged with Boeing in August 1997 in a US$13 billion stock swap, with Boeing as the surviving company.

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Following Boeing's 1996 acquisition of Rockwell's North American division, McDonnell Douglas merged with Boeing in August 1997 in a US$13 billion stock swap, with Boeing as the surviving company.

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