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Abu Dhabi, UAEWednesday 12 December 2018

Boeing to have majority stake in joint venture firm with Brazil's Embraer – paper

US firm is currently negotiating a possible deal with Brazilian aircraft maker

Boeing will have a 51 per cent stake in a joint company currently being negotiated with Brazilian aircraft maker Embraer, media reports have suggested.Jason Redmond / AFP
Boeing will have a 51 per cent stake in a joint company currently being negotiated with Brazilian aircraft maker Embraer, media reports have suggested.Jason Redmond / AFP

Boeing will have a 51 per cent stake in a joint company currently being negotiated with Brazilian aircraft maker Embraer, O Globo newspaper columnist Lauro Jardim reported on Sunday.

Boeing has agreed to a Brazilian government demand that the US company have no more than a 51 per cent controlling share, Jardim said, without citing sources.

Embraer said it would not comment on the matter. Boeing did not respond to a request for comment.

Boeing has sought Brazilian government approval of the partnership with Embraer that would create a new company focused on commercial aviation, excluding Embraer's defence unit, Reuters reported three weeks ago.

The Valor Economico newspaper later reported that Boeing's proposal would give it an 80 per cent to 90 per cent stake in a new commercial jet business with Embraer.

Embraer is the world's third largest plane maker and the leader in the 70-seat to 130-seat regional jet market.

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With the proposed tie-up, Boeing would be the market leader in the smaller passenger jet market, creating stiffer competition for the CSeries aircraft programme designed by Canada's Bombardier and backed by European rival Airbus.

Boeing's initial plan to buy Embraer was rejected by the Brazilian government because it did not want a foreign company to control its defence unit.

The government maintains a so-called golden share in Embraer, a former state enterprise, that gives it veto power over strategic decisions, including Boeing's push for a tie-up.

On Thursday, Brazilian Defence Minister Raul Jungmann told reporters that Boeing had understood Brazil's refusal to give up control of Embraer. He said negotiations on the creation of a third company were advancing well.