The European Union’s decision on the joint venture between Boeing and Embraer can only take place on August 7. The new deadline date was announced by the European Commission, an anti-trust regulator investigating the $ 4.2 billion deal under which Boeing will take over 80% of the Brazilian manufacturer’s commercial jet line.
If the process lasts until August, it will mean that the two manufacturers will have taken two years to approve the deal, which was announced in July 2018. Europe is currently the only barrier for the agreement to take effect due to fears of market concentration with the end of the third competitor to produce passenger jets.
The strictness of the Europeans, however, contrasts with the short term that the case was analyzed by the anti-trust agencies in Brazil, USA and China. Not coincidentally, Europe is home to Airbus, the largest manufacturer of commercial jets in the world and did not experience the same suspicion when it took over the C Series jet line from Bombardier, a company that today no longer produces passenger aircraft.
The European Commission’s investigation started in September 2019 and was interrupted a few times due to the need to send documents and information. In such cases, regulators “stop the clock” while waiting for this data to be sent. This occurred on February 24 when the commission determined April 7 to resume work.
The EU slowness in judging the joint venture already has harmful effects on the agreement. The escalation of the coronavirus crisis has brought down the market value of these companies and there is considerable skepticism about the future of the partnership. Boeing is seeking help from the US government to overcome the critical moment and it is not known how it will justify the $ 4.2 billion investment in Embraer.
At the same time, the Brazilian manufacturer has seen its backlog of commercial jets decrease as it accumulates losses and sees its market value drop to just a third of what it was worth in 2018. Perhaps August is too late to judge something that may not even exist in a few months.