Boeing Co (NYSE:BA) is planning to own about 51% stake in the Brazilian aircraft maker Embraer, according to O Globo newspaper. The report indicates that Boeing has signed an agreement with the Brazilian government to take not more than the specified percentage of shares in the joint company. However, the two companies have declined to comment on the news.
The partnership brings more business opportunities for both firms that would enable them focus on improving the commercial aviation and other key strategic areas. Embraer which is the third largest aircraft maker in the world manufactures quite a number of 70-to-130-seater aircrafts.
If the deal closes, the Boeing would become the market leader in its tinier passenger jet space thus increasing the competition with Bombardier Inc (Canada-based) and Airbus SE (European-based) firms and other firms that focuses on the CSeries.
The initial plan for the US-based Boeing was to fully acquire Embraer but the Brazilian government declined the proposal as it would not leave its defense unit in the hands of a foreign company considering its strategic security aspects. The Brazilian government has maintained its ‘golden share’ in Embraer so as to have more power to make strategic decisions for the betterment of the country.
According to Raul Jungmann, the Brazilian Defense Minister, Boeing had accepted the government’s adamant position to give up the control of the Embraer and the negotiations are going on well, and soon the laid down plans would be implemented.
Meanwhile, a multibillion deal between Boeing and the US President Donald Trump has cropped up for the two Air Force planes. According to CNBC, President Trump recently held crucial meetings with the officials from Boeing to negotiate the deal on the two 747 jumbo airliners that the US military had acquired from the company last summer.
THE MORNING REPORT
Start your workday the right way with the news that matters most.
The discussion revolves around the negotiations between the US Air Force and Boeing that were once highlighted in 2016 when the newly elected president tweeted on the outrageous costs and termed it as ridiculous.