The Brazilian government has approved a joint venture between Embraer and Boeing, capping weeks of uncertainty in which Brazilian President Jair Bolsonaro expressed hesitation.
The approval maintains the original terms of the deal, with Embraer selling 80 percent of its commercial airplane division to Boeing for $4.2 billion, which will have operational and management control of the new venture.
A last minute change notes that the tie-up will “maintain the current jobs in Brazil,” a move that might appease union workers and politicians who had raised concerns that, if the deal was approved, Boeing would then slash jobs. The companies had previously been noncommittal on the issue.
The tie-up between Embraer and Boeing is seen as part of a reshaping of the global aviation market for mid-size jetliners. It follows a similar deal by Boeing’s rival Airbus which bought Bombardier’s commercial plane division that competed with Embraer.
The deal still must now be voted on by Embraer’s private shareholders within the next 30 days, but winning the backing of Brazil’s government was the biggest hurdle.
If approved by shareholders, the companies will then have to seek regulatory approval in several countries.
