Brazil: the minister of Defence, against a control of Embraer aircraft by Boeing

(Reuters) – The brazilian minister of Defence has expressed on Thursday its opposition to a transfer of control of Embraer to Boeing (NYSE:BA), on the grounds that the defence operations of the aircraft manufacturer, the brazilian could not be separated from civilian activities.

Boeing and Embraer have said the last week to discuss “a possible combination of their operations”, an operation that could consolidate the duopoly world existing in the sector of commercial aircraft, provided that the brazilian government gives its blessing. The two groups gave no other details.

On Thursday, the minister of Defense, Raul Jungmann, said that the ministry feared that the negotiations between the groups had progressed without his knowledge.

“No country in the world would the control of a company like Embraer. It has a nucleus of defence, which is inalienable,” he said to the press in Brasilia.

He added that the department would be more in favor of an agreement that would preserve local control of the business and that he would send a representative to the board of directors of Embraer for further information.

The brazilian government has a right of veto on strategic decisions of the company.

The brazilian president Michel Temer, also expressed his opposition to any attempted takeover of Embraer by Boeing, had declared on 22 December that the government could use a specific action to so-called “golden share” to block the american group.

He had, however, added that he was in favour of a cash injection from foreign groups in Embraer.

(Ricardo Brito; Claude Chendjou for the French service, edited by Benoît Van Overstraeten)