Embraer says still in talks with Boeing on tie-up
SINGAPORE - Agence France-Presse
Brazil’s Embraer said on Feb. 7 it was still in talks with U.S. aerospace giant Boeing on combining their commercial air operations into a new company.
The comments by Embraer’s commercial chief executive followed a Brazil newspaper report on Feb. 6 that Boeing had presented a plan to Brazil’s government which would give it a stake of up to 90 percent in the new venture.
“At this stage, Embraer has not received a proposal,” John Slattery told a media briefing on the sidelines of the Singapore Airshow.“The reason is that parties continue to act identifying structures that might work.”
Boeing and Embraer have been in talks to combine their operations, which would see Boeing holding up to 90 percent of the new company to be based in Chicago, a person familiar with the talks told AFP on Feb. 6.
Embraer’s military operations would not be affected by the transaction and would remain under Brazilian control, that person said.Both companies in December confirmed the talks in a filing to the Brazilian securities exchange.
It follows the deal struck by Boeing rival Airbus last year with Canada’s Bombardier, which saw the European giant take over the C Series aircraft program.
Should both deals go ahead, it could extend the Boeing-Airbus duopoly into the regional jet market.
However, the talk of a merger drew immediate objections from the government in Brazil, which holds a so-called golden share with veto power over Embraer transactions.
“We need to allow the working group to surface something that will work for the golden shareholder and work for the other parties that are at the table,” Slattery said, adding that there is “good cultural synergies” between the companies.
Embraer, the world’s third-largest aircraft manufacturer with nearly $6 billion in sales, was privatized in 1994 and is one of Brazil’s success stories.
It offers a range of civil and military aircraft as well as business jets.
At the same briefing, Slattery said the jetmaker is looking to expand its footprint in Southeast Asia by targeting flag carriers and low-cost airlines.