Shareholder mounts challenge against Embraer-Boeing deal

victoria@aviationnews-online.com
By victoria@aviationnews-online.com July 10, 2018 12:25

Shareholder mounts challenge against Embraer-Boeing deal

Renato Chaves, an Embraer shareholder has filed a complaint with Brazil’s securities regulator, CVM, claiming that the joint venture with Boeing is contrary to Embraer’s statute that forbids any investor to own 35% or more of its shares directly or indirectly, reports newspaper Valor Econômico. Chaves told the newspaper that the deal was “a disguised acquisition of a controlling stake”.

Under the terms of the deal, Boeing will take an 80% stake in a joint venture containing Embraer’s regional commercial aircraft manufacturing and services business, with Embraer retaining 20% and an option to sell it to Boeing. The deal is locked for ten years. Embraer would retain complete control of its existing defence business but with plans in place to set up a further JV between the two companies to explore defence products.

The deal needs to secure government approval, which may still present a roadblock even after the sensitive defence business was intentionally carved out. When the deal was announced last week, politicians in Brazil on both sides of the political divide, expressed their concern about the deal. Presidential elections are being held in October and the  current President Michel Temer, who is not standing for re-election, will leave office on January 1. The consensus is that Temer will likely approve the deal before he leaves but if the deal isn’t closed by the end of the year, a new president may not be so supporting of the joint venture.

victoria@aviationnews-online.com
By victoria@aviationnews-online.com July 10, 2018 12:25