Embraer’s shareholders have approved a proposed strategic partnership with Boeing. Having gained the Brazil government’s approval earlier in 2019, the joint venture appears to moving forward, but not without a heavy opposition.
Embraer shareholders approved the proposal to establish a joint venture to Boeing during an extraordinary general shareholders’ meeting on February 26, 2019. However, the meeting almost fell through when on February 22 a Brazilian court issued an injunction, blocking the tie-up voting meeting.
To establish the joint venture, Embraer would be selling a 80% stake at in its commercial aviation activities, including aftermarket support services, to Boeing for $4.2 billion. The Brazilian plane maker intents to keep its defense and executive jet business units and associated services operations.
Brazilian authorities were initially concerned of losing control over Embraer’s military division. Nevertheless, the authorities and now the shareholders have now agreed on a second joint venture to “promote and develop new markets” for the multi-mission medium airlift KC-390. Embraer is to hold 51% and Boeing the remaining 49%.
Embraer, Boeing joint venture was first announced in July 2018. The two companies agreed on the terms of it in December 2018. Initially reluctant to to give their blessing, the Brazilian government finally approved the merger in January 2019. A day after, the Brazilian plane maker’s board of directors ratified its support for the deal and definitive transaction documents were signed.
So now, to close the transaction both parties have to obtain regulatory approvals and the satisfaction of other customary closing conditions. An estimated date on when this could be achieved remains at the end of 2019.