Boeing and Airbus—action and reaction in M&A

To form a single company on August 8, 1997 through mergers and acquisitions (M&A) Boeing

prolonged its business by merging with McDonnell Douglas, the first and third major

manufacturers of civilian jets. Only Boeing and Airbus following this Merger & Acquisition,

persisted to strive in the large commercial aircraft market, whose estimation cost was

approximately USD 1.1 trillion over the next two decades. Its market share boosted to 70 percent

as a result of Boeing’s merger with McDonnell Douglas (Kovacic, W.E., 2000)

In response, from a consortium to a corporation Air bus has changed its structure to management.

Management committee of Airbus alleged the move meant to reinforce the company’s

competitiveness by enabling independent financing and rapid decision-making, which were in

the midst of the reimbursements of such independent management, to cope with the attacks of

Boeing and McDonnell Douglas to thrive into the aviation market (Kovacic, W.E., 2000) and

(hankyung.com, 1997).

Airbus assimilated a mainstream stake in the C series of small passenger aircraft industrialized

by the Bombardier Canadian aircraft company in October 2016. In reaction, Boeing sought after

to acquire Embraer aircraft manufacturer of Brazil which mainly manufactured 70- and 100-seat

aircraft.

On that note, Boeing and Airbus had concentrated on the large passenger market, overlooking the

less than 100 passengers for the reason that the smaller aircraft has the similar manufacturing and

development cost as it is for the large passenger planes, but the margins were too low. Though,

Airbus had instigated implementing a plane for small passenger also and approach by fortifying a
majority stake in the C series of small passenger jets which are developed by a Canadian aircraft

company Bombardier. Boeing’s effort to purchase Embraer give the impression to acknowledge

strategy of Airbus’s small-sized passenger plane, Boeing had been disinclined to implement this

approach (Younhap news agency, 2020) .On the other hand, until April 24, 2020 it was not able

to grasp a final agreement and it decided to dismiss the deal with Embraer to make with a joint

venture on April 25.