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Boeing to hold majority in potential Embraer JV

Talks between Boeing and Brazil’s Embraer are still ongoing about a possible joint venture related to their commercial aircraft business, with reports that a joint company could see the US giant hold a 51% stake in the venture.

Neither company is officially making any statements at this time. Reports in Brazil’s O Globo newspaper suggest Boeing would hold the majority stake. The JV, if it comes to fruition – and that is by no means certain – would focus purely on commercial aviation and not Embraer’s defence unit.

The talks have been ongoing since late last year, with Embraer’s position as the world’s third largest aircraft manufacturer and its strong position in the 70-130-seat regional jet market making it attractive to Boeing, which does not have an airframe in that sector. It is interested in doing so in light of its rival Airbus’ recent move to acquire Canadian Bombardier’s CSeries aircraft programme.

Boeing’s initial plan to buy Embraer was rejected outright by the Brazilian government because it did not want a foreign company to control its defence unit for strategic reasons. The government maintains a ‘golden share’ in Embraer, a former state-owned enterprise, that gives it power of veto over strategic decisions, including Boeing’s potential tie-up.

A joint venture third-party company is seen as the only way a proposal could work. Embraer’s commercial aircraft chief executive, John Slattery, said at the recent Singapore Airshow that there remained many synergies between the two companies for a potential link-up, but that no one would be saying anything formally while talks continued.

 

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