Connect with us

Hi, what are you looking for?

World

Boeing, Embraer near deal on commercial air business: source

-

US aerospace giant Boeing and Brazil's Embraer are close to an agreement to combine their commercial air operations into a new company, a person familiar with the talks told AFP Tuesday.

Boeing would hold 80 to 90 percent of the new company, which would be based in Chicago.

Embraer's military operations would not be affected by the transaction and would remain under Brazilian control, the source said.

That structure could address the main roadblock to the deal between the two aerospace companies: Brazilian government opposition.

The companies in December confirmed they were in talks on a possible combination, a move that was seen as part of Boeing's strategy to counter archrival Airbus' ambitions in the smaller commercial aircraft category with a venture with Canadian company Bombardier.

However, the talk of a deal drew immediate objections from the government in Brazil, which holds a so-called golden share with veto power over Embraer transactions.

Brazil's defense ministry has referred to that control of Embraer as "a matter of national sovereignty." According to the report in Brazilian daily Valor Economico, the government would retain the "golden share" in Embraer.

Boeing chief Dennis Muilenburg told investors last week that the combination with Embraer would be "a great strategic fit."

"These discussions are productive and we're continuing to have active dialogue with the key stakeholders," Muilenburg said.

US aerospace giant Boeing and Brazil’s Embraer are close to an agreement to combine their commercial air operations into a new company, a person familiar with the talks told AFP Tuesday.

Boeing would hold 80 to 90 percent of the new company, which would be based in Chicago.

Embraer’s military operations would not be affected by the transaction and would remain under Brazilian control, the source said.

That structure could address the main roadblock to the deal between the two aerospace companies: Brazilian government opposition.

The companies in December confirmed they were in talks on a possible combination, a move that was seen as part of Boeing’s strategy to counter archrival Airbus’ ambitions in the smaller commercial aircraft category with a venture with Canadian company Bombardier.

However, the talk of a deal drew immediate objections from the government in Brazil, which holds a so-called golden share with veto power over Embraer transactions.

Brazil’s defense ministry has referred to that control of Embraer as “a matter of national sovereignty.” According to the report in Brazilian daily Valor Economico, the government would retain the “golden share” in Embraer.

Boeing chief Dennis Muilenburg told investors last week that the combination with Embraer would be “a great strategic fit.”

“These discussions are productive and we’re continuing to have active dialogue with the key stakeholders,” Muilenburg said.

AFP
Written By

With 2,400 staff representing 100 different nationalities, AFP covers the world as a leading global news agency. AFP provides fast, comprehensive and verified coverage of the issues affecting our daily lives.

You may also like:

World

Calling for urgent action is the international medical humanitarian organization Doctors Without Borders/Médecins Sans Frontières (MSF)

World

Immigration is a symptom of a much deeper worldwide problem.

Business

Saudi Aramco President & CEO Amin Nasser speaks during the CERAWeek oil summit in Houston, Texas - Copyright AFP Mark FelixPointing to the still...

Business

A recent article in the Wall Street Journal infers that some workers might be falling out of the job market altogether.