Boeing terminated its two-year-old, $4.2 billion agreement to acquire the commercial operations of Embraer, a leading regional-jet manufacturer based in Brazil, as the April 24 deadline for sealing the deal passed.
Tag: Embraer
The Brazilian government today approved the creation of a joint venture that would give Boeing control over Embraer’s commercial airplane operation.
That approval is crucial to the $4.2 billion deal, because the government holds a “golden share” in Embraer that could have been used to veto the arrangement. Some observers wondered whether the country’s newly inaugurated president, Jair Bolsonaro, would give the OK.
Today the government said that the agreement “preserves sovereignty and national interests,” and that the “golden share would not be exercised.”
The arrangement calls for Boeing to acquire an 80 percent ownership stake in a joint venture that would take in Embraer’s commercial aircraft and services operations.
Five months after announcing a tentative deal, the Boeing Co. and Brazil’s Embraer aerospace company say they’ve approved the terms for a joint venture that would take in Embraer’s commercial aircraft and services operations — plus another joint venture to promote and develop new markets for Embraer’s KC-390 military transport plane.
Boeing would acquire an 80 percent ownership stake in the commercial joint venture for $4.2 billion, the companies said. That amount is 10.5 percent higher than the figures cited for the tentative agreement announced in July: Back then, Boeing said it would take an 80 percent share of a joint venture valued at $4.75 billion, which would have worked out to a value of $3.8 billion for Boeing’s share.
The CEOs of both companies hailed the approval of the terms today in a news release.
After months of negotiations, Boeing and Brazilian jetmaker Embraer today announced a tentative agreement to form a $4.75 billion joint venture that would bring Embraer’s small-size commercial aircraft operations firmly into Boeing’s fold.
The arrangement is a strategic parry to last year’s move by Boeing’s European archrival, Airbus, to partner with Canada’s Bombardier on small-size jets.
Embraer’s engineering expertise could also come into play as Boeing gears up to design and produce a new breed of midsize jet variously known as the New Mid-Market Airplane, NMA or 797.
“This important partnership clearly aligns with Boeing’s long-term strategy of investing in organic growth and returning value to shareholders, complemented by strategic arrangements that enhance and accelerate our growth plans,” Dennis Muilenburg, Boeing’s chairman, president and CEO, said today in a news release.
Boeing and Embraer, a Brazilian regional-jet manufacturer, today confirmed that they’re discussing a “potential combination” in the wake of a Wall Street Journal report suggesting that Boeing was looking into acquiring the company,