Boeing-Embraer merger going ahead after Bolsonaro approval

Boeing-Embraer merger going ahead after Bolsonaro approval

The two companies had announced in July that American Boeing would take control of Brazilian
The two companies had announced in July that American Boeing would take control of Brazilian Embraer's commercial aeroplane manufacturing business but the deal hit a snag last week when Bolsonaro expressed concerns over the deal AFP/ERIC PIERMONT

SAO PAULO: Aviation giants Boeing and Embraer will push on with their proposed merger after Brazil President Jair Bolsonaro confirmed on Thursday (Jan 10) he would not oppose the move.

The two companies had announced in July that American Boeing would take control of Brazilian Embraer's commercial airplane manufacturing business but the deal hit a snag last week when Bolsonaro, who was sworn in as president on Jan 1, expressed concerns over the deal.

Embraer's shares took a nose dive after Bolsonaro's statement but on Monday his government said it was "not thinking of interrupting this negotiation."

On Thursday, a statement published by the presidency said Bolsonaro was satisfied that "the final proposal preserves (Brazil's) sovereignty and national interests" and hence he would not exercise his "veto" right to scupper the merger.

Under the US$5.2 billion deal, Boeing will take an 80 per cent stake in Embraer's business, with only the Brazilian company's military division excluded from the tie-up.

While Embraer, the third largest manufacturer in the world behind Boeing and Europeans Airbus, was privatised in 1994, the Brazilian government retained a veto power of its strategic decisions.

A joint statement from the two companies said they "welcomed approval by the Government of Brazil of the strategic partnership that will position both companies to accelerate growth in global aerospace markets."

Source: AFP

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