Boeing: No change of control contemplated for Embraer


© Reuters. BOEING: NO CHANGE OF CONTROL CONTEMPLATED FOR EMBRAER

SAO PAULO (Reuters) – talks between Boeing (NYSE:BA) and Embraer do not relate to a change of control of the capital of the company (brazilian), but on joint ventures and co-operations, reported Tuesday the daily brazilian Valor Ecônomico, which cites sources close to the talks.

The groups intend to enter into agreements for sharing of costs and revenues in certain activities, or to create joint companies, in the framework of a free partnership.

Boeing seeks to partner with Embraer, in particular, to complement its portfolio of aircraft, and multiply its platforms sales and develop new products.

An arrangement of this type is more likely to obtain the necessary approvals, knowing that the brazilian government has repeatedly stated its opposition to a transfer of control of Embraer to Boeing, estimating that the defence operations of the group’s brazilian aeronautical could not be separated from its civil activities.

Neither Embraer, or Boeing, were not immediately available for comment.

On 21 December, the two groups announced that they were discussing a possible combination of their activities”. Brasilia, which holds a preferred share (“golden share”) in Embraer, had immediately announced its support for an alliance in commercial aviation, but its opposition to any attempt to take control.

Boeing is working with these negotiations to strengthen the market for regional aircraft, where Embraer is very present, thanks in particular to E-Jets from 70 to 150 seats, according to analysts.

Two months ago, Airbus (PA:AIR) has taken a majority participation in the program of the CSeries aircraft to Bombardier (TO:BBDb) of 100 to 130 seats, which put pressure on Boeing to conclude an agreement of the same nature.

The negotiations Embraer/Boeing relate to the aerospace defence as well as civil aviation, according to sources.

In his article of Tuesday, Valor reported that Boeing anticipates to be able to convince the brazilian government that it may be active in the sector of aerospace defense brazilian without it creating a problem, by referring to agreements of this type in other countries such as Australia.

(Gram Slattery, Juliette Rouillon for the French service)

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