Embraer shareholders approve $4.2 billion deal with Boeing

Shareholders of Brazilian planemaker Embraer SA on Tuesday approved a deal to sell 80 percent of the company’s commercial jet division to Boeing Co, a move that could reshape the global market for aircraft of up to 150 seats.

Boeing made its bid following a similar deal between Airbus SE and Canada’s Bomardier Inc, which saw the European planemaker take a majority stake in the C Series jets, which compete directly with Embraer.

According to the Globo TV Channel, the agreement was supported by 96.8% of the voters. About 67% of shareholders took part in the expression of will.

The current stage is the penultimate in the process of concluding an agreement between the aircraft manufacturers. Now the transaction must be approved by the competent authorities of the two countries. As expected, none of them will impede the agreement.

Meanwhile, the Embraer union organized a protest outside the building where shareholders voted. Many of the protesters fear that the deal will lead to massive layoffs of Brazilians working in an aircraft manufacturing company. At the same time, Embraer shares on the São Paulo Stock Exchange as of 16:00 local time rose 2% against the background of the decision of the shareholders.

On December 17, Embraer and Boeing agreed on the terms of a joint venture (JV) deal. In accordance with this agreement, the cost of the new joint venture, which will be engaged in the construction of exclusively civil aircraft (a military unit of Embraer will not be affected), will reach US $ 5.26 billion. 80% of the company’s future shares will belong to Boeing, and 20% to Embraer.

Embraer is the third largest producer of passenger aircraft in the world and employs about 18,000 people. The most demanded products of the company include airplanes designed for 70-100 people. They are operated on air routes on which it is impractical to use large Boeing or Airbus airliners.

Source – https://www.reuters.com/

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