Boeing takes control of Embraer's commercial aircraft

The merger between Boeing and Embraer materializes. Embraer announced on July 5 that a memorandum of understanding had been signed with the American aircraft manufacturer creating a strategic partnership in the fields of commercial aircraft and defense. Two joint ventures should therefore emerge when the project is approved by the competent authorities and the Brazilian government. If all goes as planned, the transaction will close at the end of 2019, between twelve and ten months after the execution of the final agreements.

Boeing will hold 80% of the joint venture created for the commercial aircraft portfolio – whose program E2 – and badociated services. The remaining 20% ​​return Embraer. The management, president and CEO, will remain Brazilian but will report directly Dennis Muilenburg, the president of the Boeing group. The report states that Boeing and the joint venture will offer a full 70,450 seat aircraft portfolio, which excludes the Business Aviation entity.

The non-binding agreement concluded estimates the total value of the aircraft. Embraer commercial aircraft $ 4.75 billion. Boeing expects the operation to begin generating profits from 2020 and that $ 150 million in synergies can be achieved every year three years after it is implemented.

This important partnership is clearly in line with Boeing's long-term strategy of investing in organic growth and value for its shareholders, along with strategic arrangements to improve and accelerate our growth plans explains Dennis. Muulenburg

Paulo Cesar de Souza e Silva, president and CEO of Embraer, puts more emphasis on the benefits for the Brazilian economy: the commercial combination with Boeing will create a virtuous circle for the Brazilian aviation industry, increasing its sales potential, its production, employment and turnover, investments and exports […].

The second joint venture deals with defense activities, including the KC-390. Even less important than the first project, it aims to develop new markets and new applications for the division's products and services according to the opportunities jointly identified by both parties. Joint investment in KC-390 marketing and a series of specific engineering, research and supplier arrangements will enhance profits and further enhance Boeing and Embraer competitiveness says Nelson Salgado, Embraer's VP of Finance and Investor Relations.