Boeing to Take Over Brazil's Embraer Commercial-Jet Business
July 05 2018 - 9:14AM
Dow Jones News
By Andrew Tangel and Kimberly Chin
Boeing Co. will take over Brazil's Embraer SA's commercial
business in a deal announced Thursday, extending the U.S. plane
maker's reach into the market for smaller passenger jets.
Under the agreement, Boeing will take control of Embraer's
commercial airplane and services business. The Chicago-based plane
maker will have an 80% ownership stake, and Embraer will own the
remaining 20% in what was described as a joint venture. The deal
valued Embraer's commercial-aircraft operations at $4.75
billion
Brazil-based management will lead the proposed venture, though
Boeing would have operational and management control of the new
company. Management would be expected to report directly to
Boeing's Chief Executive Dennis Muilenburg.
The Wall Street Journal reported in December that Boeing and
Embraer were in takeover talks. The companies had been working to
overcome the Brazilian government's resistance to the deal
centering in large part on Embraer's defense business.
The proposed venture is expected to create about $150 million in
annual pretax cost savings for Boeing by its third year, the
company said.
Write to Andrew Tangel at Andrew.Tangel@wsj.com
(END) Dow Jones Newswires
July 05, 2018 08:59 ET (12:59 GMT)
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