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The hiring of the European giant Airbus in the regional aviation market and the military transport aircraft sales opportunities were cited by Embraer as being essential reasons to accept the agreement proposed by the American company Boeing, signed Thursday. [24] 19659002] The agreement lasted a little more than a year. It was approved by the Brazilian government on 10 – the Union has a veto over the agreements of the Brazilian manufacturer since its privatization in 1994. The operation, which creates two new companies, will be submitted to Embraer shareholders at a meeting scheduled for February 26.
In a statement to shareholders, Embraer announced that it had agreed to relinquish control of its regional airline, which includes older models and new series. E2 because the Airbus Europeans bought control of the main competitor of the Brazilian company, the Canadian series Bombardier, as part of a deal announced in October 2017. [19659002] This and the l & # 39; entry of new Russian, Chinese and Japanese competitors in the 90 to 150-seat aircraft market dominated by Embraer have changed the reality of the market, according to the text, which describes in detail the complex separation operation of the Commercial aviation area of the defense lines and jet planes of the Brazilian company. Embraer did not have a choice between Boeing's offer to maintain its market competitiveness.
From the American point of view, although not described in the Brazilian communiqué, the dynamics of the Embraer engineering sector also arouses interest. Boeing is behind in the development of a new mid-size aircraft and Embraer staff should work hard for this new project.
One of them is now known as NewCo, the acronym for "New Company", and will have US control at 80%. Boeing will pay Embraer 4.2 billion US dollars to obtain this part of the new company, which will include Brazilians as minority shareholders. Under the agreement, the net worth of NewCo is expected to rise to $ 2.1 billion and liabilities to $ 1.4 billion. Its total value is $ 5.26 billion.
The shareholders of Embraer will receive, if they approve the transaction expected by the negotiators, $ 1.6 billion in dividends for the home. Negotiations will end in 2019, finalizing the personnel details: NewCo will have approximately 9,000 employees, the same number of Embraer civil employees as today – the manufacturer employs 18 000 people, including 16,000 in Brazil.
The agreement also aimed to solve the problem of intellectual property: today, Embraer has about 3,000 patented articles under discussion. A management committee will be set up, if the company is approved, to deal with the issue.
In addition to the new company, which may or may not retain the name E2 on the commercial jets it will sell, the settlement establishes EB Defense. This joint venture will hold 51% of the rest of Embraer, which has remained between the lines of defense and senior management of aviation, and 49% of Boeing's capital. It will market the new contracts for the KC-390 transport aircraft, considered the biggest promise of the Brazilian automaker's military market.
EB Defense will have the final badembly line of the KC-390 in the United States and its headquarters. will be in Delaware. This provokes protests from trade unionists who plan to denationalize the product, but the agreement provides for the current Gavião Peixoto (SP) badembly line to be kept alive. In practice, it will be necessary to pre-bademble the aircraft, which will be finalized in the United States
. This is necessary to be able to sell the KC-390 in the US market, the largest in the world, and benefit from tax benefits. government in the case of export to other countries. The current contract for the manufacture of 28 aircraft intended for the Brazilian Air Force (FAB) and its probable first sale abroad in Portugal remain in the hands of the "old Embraer".
Brazil has invested 5 billion rubles in the development of the aircraft, a value that will be reimbursed at the expense of 3.1% of royalties with each new contract.
The estimated world market is 3,000 transport aircraft with a capacity of 10 to 30 tonnes of freight. The average age of the fleet is 30 years old and it is now dominated by the venerable Boeing rival, the Lockheed C-130 Hercules. The old four-engine propeller is a project that has been constantly modernized since the 1950s and Boeing saw the modern KC-390 jet as the ideal competitor for this niche.
The agreement also divides certain shared functions between companies. The Gavião Peixoto line, for example, could be used by EB Defense for at least 20 years. The production of civilian items by Embraer's overseas subsidiaries, such as the Portuguese company OGMA, is also subject to discrimination.
The fine in case of termination of the agreement raised $ 100 million for Boeing and $ 75 million for Embraer. . If approved by the shareholders' meeting, the transaction will be transmitted to the competition and market regulators in Brazil and the United States
.
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