Boeing-Embraer Deal Blocked by Brazilian Court

Dec 8, 2018

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It’s no secret that Boeing has been eyeing the commercial aviation division of Embraer. The Boeing company has been in talks with Embraer to take a huge ownership position in the company for well over a year now.

Embraer’s main competitor — Canadian based Bombardier — is essentially out of the commercial aviation business after recently selling off it’s C-Series program to Airbus. Which is why it’s no surprise that Boeing is still looking to scoop up the only manufacturer with a real competitor to the new Airbus A220 line.

Embraer E195-E2 Paris Air Show

However, a Brazilian court this week had other thoughts on the arrangement between Boeing and Embraer. The Brazilian government currently has veto power inside the third largest airframe manufacturer in the world and has not been willing to allow the company to move forward with inking the deal. Brazil also has a newly elected government coming into power in January. The judge cited this in his decision, saying that any decision should be put off until the new government assumes power early next year.

The court also said that a lack of oversight between the commercial aviation division and the military arm of Embraer needs to be addressed before the deal moves forward. Currently a two person panel — one from Boeing and one from Embraer — would be responsible for determining what technology and intellectual property will remain sole purview of the military division, where Boeing will have no control.

The court’s ruling hasn’t killed the deal off completely, but simply put it on hold for now. Brazil’s President-elect Jair Bolsonaro has stated he supports the deal. That’s good news for Boeing as they look to finally seal this deal they have been working on for so long and position themselves to be able to complete with Airbus in the short-haul market.

H/T: Reuters

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