Quick McDonnell Approval Unlikely
The Taiwan government is unlikely to take swift action to approve a proposed investment between McDonnell Douglas and a group of Taiwanese investors, the chairman of the Economic Affairs Committee in Taiwan’s legislature said today.
Taiwan Aerospace Corp., a government-based consortium, is now seeking support from other private investors and will soon begin a new round of negotiations with McDonnell. But even after the two sides reach a new agreement, Taiwan’s government will need time before approving the deal, said Kao Tzu-min, chairman of the committee.
Vincent Siew, minister of economic affairs, presented a report on the proposed investment to Kao’s committee on Wednesday.
“For political reasons, the minister may want to let things cool down for some time. If the process is too fast, it can create more opposition,” said Kao, an independent legislator who supports the proposed investment.
The process may drag on well into the summer, he said.
It is unclear what role the Taiwan government will play in the deal. Taiwan Aerospace Chairman Earle J. S. Ho said Wednesday that he hopes the government will have a 49% share in the Taiwanese investment. Ministry officials and legislators have said that without government involvement, private investors were unlikely to express interest in the deal.
Taiwan’s legislature would have to approve participation by the government. When the time finally comes for legislators to decide, a majority will support the deal, Kao said.
Members of the legislature’s Economic Affairs Committee may need to travel to the United States in June or July to learn more about the deal, Kao said.
“Our committee doesn’t have anyone who is an expert on high-technology,” he said.
Some committee members received seven volumes of the nine-volume due-diligence study the day before the hearing, he said. Two volumes containing financial information on McDonnell have so far been kept confidential.
Another hearing on the proposed investment is not likely to take place until Taiwan Aerospace and its partners reach an agreement with McDonnell, Kao said.
