Brazil Will not oppose $4.2 Billion Boeing venture with Embraer
Boeing and Embraer aim to gain approval from regulators and shareholders to complete a joint venture between their companies by the end of 2019 now that Brazil’s government announced it will not oppose the deal.
Brazil’s government holds ownership in Sao Paolo-based Embraer that gives it power to veto proposed sales, so its approval announced on Thursday clears a major hurdle for Boeing to pay $4.2 billion to create a new company from Embraer’s commercial aircraft business. Boeing will hold an 80 percent ownership stake in the new company and Embraer will hold the remaining 20 percent. The deal would give Chicago-based Boeing additional resources to compete against rival planemaker Airbus, which has its headquarters in the Netherlands.
Brazil’s President Jair Bolsonaro posted on Twitter on Thursday that the government that after meeting with his cabinet “it became clear that the sovereignty and interests of the nation are preserved.”
The national interests Bolsonaro referred to include terms for Embraer to maintain a dominant stake in a separate defense-related venture with Boeing. Embraer would maintain a 51 percent stake in that venture to promote and develop new markets for the KC-390 military airlift plane, the Sao Paolo-based company announced in a press release.