Daily Management Review

Brazil green-lights Boeing-Embraer joint venture


01/11/2019


The Brazilian government has approved a strategic partnership between Boeing and Embraer, which will set up two joint ventures (JVs), according to a general release of the companies.



Gereon K.
Gereon K.
"Embraer and Boeing welcome the approval of their strategic partnership by the Brazilian government, which will allow both companies to accelerate growth in the global aerospace markets," the press release says. Now the transaction must be approved by shareholders and the competent authorities. Closing of the transaction is expected by the end of this year.

The companies agreed on terms of the partnership in December last year. It is about creating a joint venture, which includes the production of commercial aircraft and Embraer services, in which Boeing will buy a share of 80% for $ 4.2 billion, and Embraer will own the remaining 20%. In addition, the companies agreed to create another joint venture for the promotion and launch of the Embraer KC-390 medium-range aircraft. In this joint venture Embraer will own 51% of the shares, and Boeing - 49%.

Creation of a joint venture for the production of regional machines based on the commercial aircraft division of Embraer was announced in July of this year. In December, the Brazilian court made a preliminary decision to suspend establishment of an alliance between Boeing and Embraer. However, later in December, a federal-level appellate court overturned this ban.

Boeing produces a wide range of civil and military aviation equipment, develops space programs. It structure has two large divisions - Boeing Commercial Airplanes, engaged in the construction of civil aircraft, and Integrated Defense Systems, which runs space and military programs. The staff amounts to about 140 thousand people.

Embraer is a Brazilian aircraft manufacturing conglomerate, one of the leaders of the global market for passenger regional aircraft. The company also produces corporate, military, agricultural aircraft.

source: reuters.com






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