Commercial

Brazil OKs Boeing’s Acquisition of Embraer

By Woodrow Bellamy III | January 10, 2019
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Embraer Legacy 650 flight deck.

Boeing has received approval from the government of Brazil to acquire an 80 percent ownership stake in Embraer’s commercial division and establish separate joint venture between the two companies related to the KC-390 program.

Under the strategic partnership first proposed by Boeing in July 2018, Embraer will keep the remaining 20 percent of its commercial division and give 49 percent of the KC-390 program to Boeing as well. After receiving the Brazilian government’s approval, Boeing will now await a vote from Embraer’s board of directors. The transaction will then be subject to shareholder and regulatory approvals.

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“Assuming the approvals are received in a timely manner, the transaction is intended to close by the end of 2019,” Boeing said in a statement.

A statement released by the government of Brazil notes that the final proposal will preserve “sovereignty and national interests.”

By acquiring Embraer, Boeing will increase its competitiveness against the Airbus in the 90 to 160 seat commercial aircraft segment. The 2017 Airbus acquisition of a 50.1 percent controlling stake in Bombardier’s C Series program has already amassed an order backlog of 480 A220s for the French airplane maker. Airbus also recently confirmed orders for 120 total A220s from JetBlue and U.S. startup carrier Moxy.

Boeing and Embraer believe the joint venture has the potential to offer a commercial aircraft portfolio ranging from 70 seats to more than 450 seats.

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