European Commission begins investigation into Boeing-Embraer joint venture

Darren Wood
By Darren Wood October 9, 2019 11:14

European Commission begins investigation into Boeing-Embraer joint venture

The European Commission (EC) has opened an in-depth investigation to assess the proposed joint venture by Boeing and Embraer.

Under the EU merger regulation, the commission is concerned that the transaction may reduce competition as regards commercial aircraft.

Regarding its reasoning, the commission has said that the removal of Embraer as the third largest global competitor in the commercial aircraft market could lead to “higher prices and less choice” for customers.

The joint venture would be solely controlled by Boeing as it would take over Embraer’s global commercial aircraft business (product development, production, marketing, services).

Recently, Boeing and Embraer’s strategic partnership is set to be delayed until early 2020. The deal had originally expected to close by the end of 2019.

Commissioner Margrethe Vestager, in charge of competition policy, said: “Markets for commercial aircraft need to function well to deliver innovative and efficient products to customers at a fair price. Therefore, with our in-depth investigation, we want to make sure that mergers in commercial aircraft do not significantly reduce effective competition on prices and product development.” 

The new company, Boeing Brasil-Commercial, in which Boeing will hold an 80% share, with Embraer holding the remainder, will take on Embraer’s commercial aircraft business.

The commission is expected to make a decision by 20 Feb 2020.

Darren Wood
By Darren Wood October 9, 2019 11:14