Boeing ends talks for $4 billion tie-up with Brazil's Embraer

[Omaha Steve]

Source: CNBC

By Leslie Josephs

Boeing has ended more than two years of tie-up talks for a $4.2 billion commercial jet deal with Brazil’s Embraer, the latest derailment at the aerospace giant.

“It is deeply disappointing. But we have reached a point where continued negotiation within the framework of the [merger transaction agreement] is not going to resolve the outstanding issues,” said Marc Allen, president of the Embraer Partnership and Group Operations, in a Boeing news release.

Boeing said Embraer did not satisfy conditions under the agreement, which expired late Friday but the Chicago-based company declined to go into specifics. Embraer did not immediately respond to a request for comment.

The deal was meant to help Boeing grow even stronger in commercial aerospace to better compete with European rival Airbus. Airbus, for its part, has already taken a stake in what’s now called the A220 passenger-plane program of Canada’s Bombardier.



An Embraer E195 jet airliner on display at the 2019 Paris Air Show opened at Le Bourget Airport.
Marina Lystseva | TASS | Getty Images

Read more: https://www.cnbc.com/2020/04/25/boeing-terminates-joint-venture-agreement-with-brazils-embraer.html

[sandensea]

1. Most Brazilians must be relieved - not least, Brazil's own military.

Embraer is not only Brazil's state-owned aircraft maker, it's the 3rd-largest commercial aircraft maker in the world - behind Airbus and Boeing itself.

In many ways, it's the pride of Brazil.

To be sure, it had already been privatized in 1994 - but the Brazilian state retained the 'golden share' (i.e. veto power over boardroom decisions).

This second privatization (more of a trans-nationalization, as it's mostly Brazilian investors selling to Being) would rid the state of that golden share.

My guess is that Bolsonaro was holding out for a juicy propina.

[RainCaster]

2. Boeing would have destroyed Embraer

Such a well run company, subjecting them to Boeings' BoD would be like DFT running them.