Boeing and Embraer joint venture does not include business aviation
Boeing and Embraer have entered into a joint venture, which will see Boeing taking an 80% stake in the commercial aircraft business of Embraer.
The deal does not include the business-aviation divisions of either company.
“By forging this strategic partnership, we will be ideally positioned to generate significant value for both companies’ customers, employees and shareholders – and for Brazil and the United States,” said Dennis Muilenburg, chairman, president & CEO, Boeing. “This important partnership clearly aligns with Boeing’s long-term strategy of investing in organic growth and returning value to shareholders, complemented by strategic arrangements that enhance and accelerate our growth plans,”
The two companies signed a Memorandum of Understanding (MoU) on July 5, saying that it will help accelerate both companies’ growth in global aerospace.
Boeing’s 80% share in the joint venture is valued at $3.8 billion, which values Embraer’s commercial aircraft unit at $4.75 billion.
Once the final details of the joint venture are agreed, Boeing will seek authorisation from its shareholders as well as from the government of Brazil before the deal can be finalised.
When both agreements are in place, the deal is expected to be completed within 12 – 18 months. Boeing is aiming to close the transaction before the end of 2019.
“The agreement with Boeing will create the most important strategic partnership in the aerospace industry, strengthening both companies’ leadership in the global market,” said Paulo Cesar de Souza e Silva, president & CEO, Embraer, “The business combination with Boeing is expected to create a virtuous cycle for the Brazilian aerospace industry, increasing its sales potential, production, creating jobs and income, investments and exports, and in doing so, adding more value to customers, shareholders and employees.”