Boeing and Embraer close to agreement

July 03, 2018
Written by Wings Staff
Boeing Co and Embraer SA, according to a report yesterday by Brazilian newspaper Valor Economico, have prepared contracts of their proposed commercial joint venture and are expected to submit them to the Brazilian government within two weeks. The news was subsequently reported by Reuters from Sao Paulo, Brazil.

Bloomberg News reported on April 10, 2018, that the two airplane makers were likely to make a deal, although negotiations were complicated by the necessary involvement of Brazil’s government. The country’s newly appointed Defense Minister Joaquim Silva e Luna at the time told Bloomberg the parties were getting closer, adding, “I would say, in short, this will end in marriage.”

The planemakers have been crafting a commercial joint venture, to be controlled by Boeing, that would enable them to combine their marketing, manufacturing and engineering prowess, Bloomberg reported earlier this year, and that the new company would be focused on commercial aviation, excluding Embraer’s defense division and possibly its business jet unit. Figuring out how to divide commercial, defence and business jet units has in large part lead to the delay.

Reuters explains the contracts, as described to Valor Economico through an unnamed source close to the negotiations, define how Boeing and Embraer’s engineers will be divided between the new company controlled by Boeing, and a defense company that Embraer will retain.

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