Boeing-Embraer merger progress delayed

Lauren Eldershaw
By Lauren Eldershaw December 7, 2018 11:41

Boeing-Embraer merger progress delayed

The Growth Frontiers London event sparked debate and discussion around the regional aircraft market, bringing together investors, arrangers, brokers, lessors and airlines to discuss current challenges and opportunities. As has become the norm for most aviation conferences, there was plenty of talk about the current headwinds – fuel, competition, the current supply/demand situation that is pushing up aircraft values and depressing lease rates – to name a few. However, despite the general agreement that a correction is coming, it is clear that liquidity remains buoyant, which is likely to remain at least for the short-term future. One speaker suggested that the lower yields in this sector are actually even more attractive for investors since they are more believable than the double digits returns of yesteryear.

Given the regional focus of the event, the Boeing-Embraer merger remained a topic of conversation, especially since news on the progress of the deal has stalled recently. Yesterday, that reason was made clear when a Brazilian federal judge, Victorio Giuzio Neto, issued an injunction freezing the merger until the incoming government of Jair Bolsonaro takes office in the new year.

As reported by The Financial Times, the judge ordered the companies to provisionally “suspend any concrete effect of an eventual decision of the board of Embraer” to transfer the commercial jet unit of Embraer to Boeing “through a joint venture”.

Despite the two parties agreeing the deal in July for $4.75bn, where Boeing would take an 80% share in Embraer’s commercial jet operation, the deal has been on hold awaiting the blessing of the Brazilian government.

Lauren Eldershaw
By Lauren Eldershaw December 7, 2018 11:41