Boeing In Talks for a Potential Takeover of Embraer

Dec 21, 2017

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Boeing and Embraer have been in talks for a potential Boeing takeover of the Brazilian aircraft maker. As reported by The Wall Street Journal, the deal would help the Chicago-based Boeing strengthen its presence in the regional jet market. The deal would involve a relatively large premium for Embraer.

According to sources familiar with the matter, the talks for a takeover are on hold while the two companies wait for approval from the Brazilian government. The deal would need approval in Brazil because the government has a golden share in Embraer, allowing it to veto a deal such as this.

Because Embraer plays such a crucial role in the Brazilian economy, there’s doubt that the government will actually approve a Boeing takeover. As the WSJ reports, Boeing is willing to coax the Brazilian government into approving the deal with provisions that would protect certain aspects of Embraer, such as its brand, management and jobs. In addition, Boeing would protect the manufacturer’s military and defense operations.

If the deal does advance, it’ll help Boeing to compete in the regional jet market — one where Airbus currently has the upper hand following its recent deal with Bombardier.

Featured image by Eric Piermont / Getty Images.

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