Embraer share holders approve partnership with Boeing
The merger will include operations with trade aircraft and services
Published in 26/02/2019 - 14:53 By Flávia Albuquerque - São Paulo
The partnership between Brazilian aircraft maker Embraer and Boeing was backed by 96.8 percent of the votes cast by share holders during an extraordinary meeting held today (Feb. 26). The proposal sets forth a joint venture including operations with Embraer commercial aircraft and services. Boeing will control 80 percent of the resulting company, and Embraer 20 percent.
All of company’s operations with commercial planes was estimated at $5.26 billion, Embraer reported. The transaction is said to encompass $4.2 billion for Boeing’s 80 percent share in the new enterprise.
Embraer share holders also backed the creation of another joint venture to promote and develop new markets for military multimission plane KC-390. Under the terms of the new deal, Embraer will hold 51 percent of the actions of the new joint venture, with Boeing controlling 49 percent.
“This important partnership will prepare the two companies to offer a proposal with a more robust value to our clients and investors, in addition to creating more opportunities for our employees. Our deal will bring mutual benefits and increase the competitiveness of both Embraer and Boeing,” said Embraer CEO Paulo Cesar de Souza e Silva.
The Brazilian firm released a note stating that defense and executive jet business, as well as association service operations will remain a separate, publicly traded company. “A series of deals focusing of the supply chain, engineering and facilities will ensure mutual benefits and more competitiveness between Boeing, the joint venture, and Embraer,” the note reads.
Last December, the two companies announced they had approved the terms for the two joint ventures and the Brazilian government backed the move in January. Next, Embraer’s board ratified its support and the definitive documents were signed. The conclusion of the deal is pending approval by watchdogs and compliance with other conditions—steps Boeing and Embraer expect concluded by the end of 2019.
Embraer will continue to operate its commercial aviation departments as well as KC-390 independently until the transaction is concluded.
Translation: Fabrício Ferreira - Edition: Fernando Fraga / Augusto Queiroz
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