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Boeing and Embraer attempt a joint venture

Posted by Gabriel Alberto Bazzolo on


Boeing and Embraer will attempt to form a joint venture that would push the U.S. aerospace giant more aggressively into the regional aircraft market.

The new company, which has faced heavy scrutiny from lawmakers in Brazil, is being valued at about $4.7 billion.

The companies said Thursday that Boeing will own 80 percent of the joint venture, and Embraer the remaining 20 percent. Brazilian lawmakers have been hesitant to allow any deal, fearing the loss of control of a major industrial and defense asset. Embraer is one of Brazil’s industrial giants, and the government sees the company, which is involved in defense manufacturing, as strategically important.

President Michel Temer had previously rejected selling control of the jet maker to Boeing. The government has veto power over any change in the company’s controlling interest, an indication of how highly prized it is and how sensitive any deal with foreign investors is.

Any partnership between Boeing, based in Chicago, and Embraer, based in São José dos Campos would counter strengthening ties between Europe’s Airbus and Canada’s Bombardier, which have threatened Boeing. Embraer’s lineup of E-jets would help Boeing counter Airbus’ new majority stake in Bombardier’s C Series planes that have 100-150 seats and help it compete with small airliners from China.

Gabriel Bazzolo
quDron

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