The logo of Brazilian jets maker Embraer is seen on a factory in Sao Jose dos Campos, Brazil, December 23, 2017. REUTERS/Leonardo Benassatto
February 2, 2018
SAO PAULO (Reuters) – Boeing Co <BA.N> and Brazilian planemaker Embraer SA <EMBR3.SA> will create a third company to oversee a joint venture for commercial jets, Globo TV’s top economic correspondent reported on Friday, without citing her sources.
Miriam Leitao reported on her blog that Embraer had accepted Boeing’s proposal to form a third company, and that the new entity would not involve Embraer’s military division.
An Embraer spokesman said the company did not have an immediate comment. Emails to Boeing in Brazil were not immediately returned. A spokesman for Brazil’s Defense Ministry said it had no immediate comment.
Embraer’s shares rose 5 percent in midday trading following the report.
Brazil’s government has made it clear that it would never accept any deal between Boeing and Embraer if the latter’s control over its military division were weakened in any way.
Boeing’s proposed tie-up with Embraer, the world’s third largest planemaker, would give it a leading share of the 70- to 130-seat market and create stiffer competition for the CSeries program designed by Canada’s Bombardier Inc <BBDb.TO> and run by European rival Airbus SE <AIR.PA> since last year.
The Brazilian government holds a golden share in Embraer giving it veto power over strategic decisions involving military programs and any change in its controlling interest.
Boeing would be willing to preserve the government’s golden share in Embraer, the people familiar with the matter said, but that may not be enough to win support.
(Reporting by Brad Brooks; Editing by Daniel Flynn and Phil Berlowitz)
