Home Business Embraer and Boeing close US $ 4.7 billion deal for commercial aviation

Embraer and Boeing close US $ 4.7 billion deal for commercial aviation

Government, which has the right to veto business, will only evaluate joint venture after elections

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Embraer and Boeing announced on Thursday Jul. 5th that they will form a joint venture that will cover all the commercial airline business and services of the Brazilian company. The US company will pay $ 3.8 billion to take 80% control of the new operation, estimated at a total value of $ 4.7 billion. The Brazilian manufacturer will have 20% of the partnership.

The transaction is expected to be completed in a period of 12 to 18 months and will be completed by the end of 2019. The companies must correct the operational and financial details of the business, which must also be approved by shareholders and regulatory bodies.

The partnership provides for 80% control of the new airline for the American company and 20% for the Brazilian airline, and is expected to be the newest global jet leader from 70 to 450 seats.

The agreement between the two companies will result in an estimated US $ 4.75 billion, and Boeing will disburse US $ 3.8 billion to Brazil for operational control and management.

With the joint venture formed, the new company is expected to be headquartered in Brazil, but the team allocated on Brazilian soil should report directly to Dennis Muilenburg, president of Boeing.

Embraer and Boeing in data
According to Euromonitor, in 2017, Boeing accounted for 18.8% market share in the aircraft production segment in the United States, while Embraer had 68.7% of production in Brazil.

Last year, Boeing captured a market of about US $ 178 billion in the US, while Embraer handled US $ 8.6 million.