Embraer and Boeing have approved the terms of a joint venture and are waiting on Brazilian government approval before the partnership starts operating.
The deal, which has been long anticipated by the industry, will see Boeing pay US$4.2 billion to own 80% of the commercial aircraft and services operations of Embraer, which will retain ownership of the remaining 20%. The joint venture is pending approval by the Government of Brazil.
Once the transaction has closed, the joint venture will be led by Brazil-based management, including a president and chief executive officer. Boeing will have operational and management control of the new company, which will report directly to Dennis Muilenburg, Boeing’s chairman, president and chief executive officer.
Embraer will retain consent rights for certain strategic decisions, such as transfer of operations from Brazil.
In a statement, Paulo Cesar de Souza e Silva, Embraer president and chief executive officer said, “We are confident that this partnership will deliver great value to Brazil and the Brazilian aerospace industry as a whole. This alliance will strengthen both companies in the global market and is aligned with our long-term sustainable growth strategy.”
The companies have also agreed to the terms of another joint venture to promote Embraer’s KC-390 multi-mission medium airlift for the defense sector. Under the terms of this proposed partnership, Embraer will own a 51% stake in the joint venture, with Boeing owning the remaining 49%.
The transaction is intended to close by the end of 2019.