Boeing, Embraer strike deal

The plane makers will enter into a joint venture comprising all of the Brazilian company’s commercial aviation operations. The US-based company will retain an 80% stake in the USD 4.7 billion deal.

Agência Brasil

São Paulo & Brasília – Embraer and Boeing said this Thursday (5) that they are forming a joint venture comprising all of the Brazilian aircraft manufacturer’s businesses and services. The US-based company is paying USD 3.8 billion for an 80% stake in the new operation, whose total value is estimated at USD 4.7 billion. Embraer will retain 20%.

The deal is expected to be completed in 12 to 18 months. The parties must agree on operational and financial aspects, and the deal still pends approval from shareholders and regulators.

Brazil’s government decided that it will look into the deal only after October, once the new Brazilian president has been elected. The federal government, which greenlighted the disclosure of the relevant fact, has the last word on the deal because after Embraer was privatized in 1994, it remained the so-called “golden share” holder.

Once the partnership has come to fruition, the joint venture will be led by a team of executives based in Brazil. However, Boeing will control and manage operations. The commercial aviation merger may offer 70- to 450-seater planes.

The deal also provides for another joint venture in defense aviation. A flagship unit in this field will be Embraer’s military transportation aircraft KC-390. Embraer’s business aviation operations haven’t been mentioned, and are expected to remain solely with the Brazilian company, as hinted at in a statement last April.

Translated by Gabriel Pomerancblum

Eric Piermont/AFP

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