Would Take A Controlling Interest A Joint Company If It Goes Through

Negotiations are continuing between Boeing and Embraer for the possible formation of a partnership that would be focused on commercial aviation.

The negotiations are seen by the industry as at least partly a response to a recent deal between Airbus and Bombardier, in which the European planmaker acquired a majority stake in the Canadian company's CSeries airliners.

But the Brazilian government has no interest in Boeing owning a controlling interest in Embraer, according to a report from Reuters. An initial bid by Boeing to buy Embraer was rejected by the Brazilian government, which said it would welcome partnerships, but not one that transferred Embraer's control to another (foreign) country. At that point, the discussions shifted to a joint commercial jet venture rather than an outright takeover, according to Bloomberg.

Boeing’s CEO, Dennis Muilenburg, was reported saying by Phys.org that he believes the two companies have "structured a deal concept that will satisfy the needs of everybody involved." The negotiations for a potential third company were confirmed by Brazilian Defense Minister Raul Jungmann last week, according to Reuters.

Such a deal would potentially make Boeing a major player in the regional jet market. Muilenburg told Bloomberg that the two companies have "highly complimentary product lines."

Muilenburg also told Reuters that some kind of deal has been in the works for years, denying that it is a reaction to the Airbus-Bombardier agreement. If such a company is formed, Boeing would own the a controlling interest in the joint venture, according to a report from AeroTime.

(Image from file)

FMI: Original report