Brazilian aerospace conglomerate, Embraer SA, confirmed on Monday that it has finalized terms of a proposed joint venture wherein the U.S. aircraft maker Boeing Co. will have 80% control over the Brazilian company’s commercial aircraft and services operations.
Valued at $4.2 billion, the long-awaited deal now only needs the approval of the Brazilian government and regulatory authorities to complete the remaining formalities, which is expected to arrive in the new year.
The announcement, which comes after extensive legal deliberation, has also enhanced the valuation of Embraer's commercial business to $5.26 billion – nearly 11% more than the offered $4.75 billion when the deal involving Embraer’s commercial division was originally announced in July.
Embear’s defense segment has been kept outside the purview of the commercial aircraft venture to minimize the concerns of Brazilian government.
However, Embraer has confirmed that both companies have also agreed to engage in another joint venture to form a separate legal entity for Embraer’s new military transport aircraft. Under this proposed JV, the newly formed entity will promote and develop new markets for the multi-mission medium airlift KC-390. In this partnership, Embraer will command a 51% stake in the JV whereas Boeing will own the remaining 49%.