BOEING AND EMBRAER: WHAT’S AT STAKE?

Since Boeing has confirmed its intention to acquire the stake in Embraer, in December 2017, the issue resounded and reignited the debate on national sovereignty in strategic areas. Surrounded by disinformation, the Brazilian government said beforehand that it will not give up the golden share (special veto share) and that the sale of Embraer’s stake or even the end of the brand was not under discussion. After the news’ initial impact, and a lot of speculation, details of what would be a new proposal from the Americans came to sight.

THIRD ENTERPRISE

After a series of discussions with the Brazilian government and its shareholders, Boeing reformulated the model for the acquisition of the indirect competitor. As confirmed by market sources from different areas, the proposal sets forth the creation of a third enterprise, which will be responsible for the development and commercialization of part of Embraer’s aircraft portfolio, with the participation of both companies, but controlled by Boeing. In this agreement, the Americans will hold between 80 and 90 percent of the stake, while Embraer will hold the rest, that is, a minority share. The contract, which upon the closure of this edition was not formalized, foresees that Boeing will absorb the entire civil aviation segment of the Brazilian manufacturer, including both the regional aircraft and business jet divisions, while the military sector would remain under the control of the Brazilian headquarter, without any link with the American group.

The model is similar to that agreed between Airbus and Bombardier, which made the CSeries program becoming an independent division. The main difference would be about the investors’ compensation, since Airbus has not rewarded Bombardier’s shareholders, because the program was not profitable and without prospects of growth under the control of the Canadian company, in addition to the fact that the business jet division having remained with the Canadians.

It is reported that the purchase of the part of Embraer makes part of a larger plan of Boeing, whose objective is to get to 2020 with an income of nearly $ 100,000 million. In 2017, the income was slightly higher than $ 93 million, which already could have been reached with Embraer’s complete operations.

$ 6,000 MILLION

The contract that should be signed between Boeing and Embraer will allow maintaining the brand and projects in an independent manner of Boeing’s 7X7 series. Moreover, when leaving out the military division, the agreement may occur without facing the Brazilian government’s resistance, or without becoming a political campaign theme, which would probably affect the business. Boeing still has to detail the proposal, which in