The European Union gave its formal blessing Wednesday to Boeing’s $15 billion takeover of McDonnell Douglas, ending a seven-month trans-Atlantic tussle over the fusion of the U.S. aviation giants.
Official approval from the EU’s executive agency, the European Commission, was widely expected after Boeing offered a package of concessions last week.
Boeing agreed to drop clauses in contracts that committed three U.S. airlines - American, Delta and Continental - to buying jetliners exclusively from Boeing for 20 years.
Monday is to be the first day of business for the combined company.
Although the 20-member Commission approved the deal without further debate, the EU body insisted it would keep a close eye on the merged company to ensure Boeing sticks to its pledges.
“The Commission will strictly monitor Boeing’s compliance with these commitments,” it said in a statement. If not, the Commission warned it would take “appropriate measures” against the company.
In Seattle, Boeing said it was pleased with the approval.
“It is great to have this final hurdle behind us,” Boeing Chairman Phil Condit said. “We can now put our total focus on Monday … when we begin operations as the new Boeing Co.”
The Commission has powers to impose fines of up to 10 percent of global turnover on firms that fail to respect the EU’s merger regulations. That could total $4 billion a year for Boeing.
EU governments in 1990 granted the Commission powers to investigate large mergers and to veto those judged to distort fair competition within EU markets.
Although the Commission could not block the fusion of the two U.S. companies, it could have excluded them from the lucrative European airline market which is forecast to account for almost a third of global demand over the next 10 years.
Last week, the EU and the United States appeared on the brink of a trade war with the Commission refusing to approve the deal and U.S. officials threatening retaliation if the Europeans blocked it. Boeing finally came up with the required concessions on July 22, a day ahead of a deadline set by the EU.
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