Boeing and Embraer’s strategic partnership delayed until 2020

Darren Wood
By Darren Wood October 4, 2019 09:08

Boeing and Embraer’s strategic partnership delayed until 2020

Boeing and Embraer’s strategic partnership is set to be delayed until early 2020 due to The European Commission recently indicating it will open a Phase II assessment in its review of the transaction.

In response to this Boeing and Embraer have said they “look forward to assisting with that review”.

News of the delay follows a detailed assessment by the US Federal Trade Commission, the parties’ strategic partnership has received clearance to close in the United States.

It’s a crucial deal for Boeing as it looks to use this as a challenger to Airbus and its 50.01% equity stake it took in Bombardier’s C-Series program which has now become the Airbus A220 family.

Boeing and Embraer have received approval for the partnership, with the companies stating they have undertaken diligent planning for the creation of the joint venture made up of the commercial aircraft and services operations of Embraer.

Boeing will own 80% of the new company, to be named Boeing Brasil – Commercial. Embraer will hold the remaining 20%.

The transaction, which is said to be for around $4.2 billion, remains subject to regulatory approval.

Boeing and Embraer are also preparing to launch a joint venture to promote and develop markets for the multi-mission medium airlift KC-390.

Under the terms of the proposed partnership, Embraer will own a 51% stake in the joint venture and Boeing will own the remaining 49%.

Two KC-390 milestones were recently achieved by Embraer: the first KC-390 was delivered to the Brazilian Air Force, and the first international purchase was announced by Portugal.

Darren Wood
By Darren Wood October 4, 2019 09:08