Boeing-Embraer joint venture is approved by shareholders
Partnership between the two manufacturers for the formation of a new company responsible for Embraer commercial jets is expected to be completed by the end of 2019
As expected, Embraer shareholders approved the partnership between the Brazilian company and Boeing, announced in December 2018. The US manufacturer will pay $ 4.2 billion for 80% of the new company that will be formed to design and manufacture the E -Jet airliners, airplanes with capacity between 70 and 130 seats and that will complement the line of aircraft of Boeing.
The joint venture is now under review by both countries regulatory authorities in addition to pending details negotiations.
“This groundbreaking partnership will position both companies to deliver stronger value proposition to our customers and other stakeholders and create more opportunities for our employees,” said Paulo Cesar de Souza e Silva, President and CEO of Embraer. “Our agreement will create mutual benefits and boost the competitiveness of both Embraer and Boeing.”
“This strategic global partnership will build on Embraer’s long-standing history of collaboration, benefit our customers and accelerate our future growth,” said Dennis Muilenburg, Boeing chairman, president and chief executive officer.
In the statement, Boeing and Embraer ensured that the Brazilian company’s operations in executive jets business, defense and associated services will be preserved, but will have cooperation agreements so that the benefits of the partnership can be extended to them.
There is, however, a concern in Brazil regarding some clauses of the agreement that allow the new company to operate in the segment of aircraft of up to 50 seats, where Embraer business jets are today. The two companies denied this possibility, saying the intention is to allow the joint venture to exploit the regional aviation market in the future.
At the meeting where 96.8% of valid votes were in favor of the partnership, shareholders also approved another joint venture, which will be responsible for marketing the KC-390 cargo jet. In that case, Embraer will hold 51% of the shares and Boeing, 49%.