TheJakartaPost

Please Update your browser

Your browser is out of date, and may not be compatible with our website. A list of the most popular web browsers can be found below.
Just click on the icons to get to the download page.

Jakarta Post

Boeing-Embraer merger going ahead after Bolsonaro approval

  • News Desk

    Agence France-Presse

Sao Paulo, Brazil   /   Fri, January 11, 2019   /   08:08 am
Boeing-Embraer merger going ahead after Bolsonaro approval Embraer and Boeing jetliners stand on the Tarmac of Le Bourget on June 18, 2017 on the eve of the opening of the International Paris Air Show. ERIC PIERMONT / AFP (AFP/Eric Piermont)

Aviation giants Boeing and Embraer will push on with their proposed merger after Brazil President Jair Bolsonaro confirmed on Thursday 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 January 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 $5.2 billion deal, Boeing will take an 80 percent 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 privatized 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."