Embraer/Boeing deal approved by Brazilian Government
Boeing’s plans of acquiring a large portion of Embraer to compete with Airbus’ Bombardier CSeries (now A220) deal has been stalled for quite some time now, however the situation has improved, with the Brazilian government now approving the deal.
The proposal that’s been sent to the government outlines Embraer’s sale of 80% of their commercial aircraft division for $4.2 billion. Additionally, Embraer and Boeing plan to use the partnership to “promote and develop new markets” for the KC-390 military aircraft, where Boeing will own a 49% stake and Embraer owning the remaining 51% in the program.
Jair Bolsonary, President of Brazil, initially raised concern from when he took office on January 1, stating Boeing could end up owning all of Embraer, however has since dismissed this after further discussions and analysis of the deal found otherwise.
Despite the approval from the government, shareholders and regulators must also decide whether the deal should go ahead. Shareholders have 30 days to make a decision.
Boeing aims to complete the deal by the end of 2019 providing things work out on all sides.
