Sat, Dec 23, 2017
Both Planemakers Are Keeping Quiet On Details Of The Talks
Boeing and Embraer have confirmed that the two companies are in talks that might lead to some kind of combination of the two companies.
The companies issued identical news releases Thursday announcing the talks. "The Boeing Company and Embraer (have) confirmed the two companies are engaged in discussions regarding a potential combination, the basis of which remains under discussion.
"There is no guarantee a transaction will result from these discussions. Boeing and Embraer do not intend to make any additional comments regarding these discussions.
"Any transaction would be subject to the approval of the Brazilian government and regulators, the two companies’ boards and Embraer’s shareholders," the release stated.
Analysts say that any deal would extend Boeing's reach into the very competitive regional jet market. Bloomberg reports that sources familiar with the talks say that some of the options under discussion are a joint venture allowing Boeing and Embraer to share supplier savings, and allow cross-selling both lines of commercial jets.
A full takeover of Embraer by Boeing would be controversial for Brazilian politicians, the source said. The Brazilian government owns enough of Embraer to give it veto power over any outright sale of the planemaker, making some kind of joint venture a more likely arrangement, according to an aerospace analyst with Credit Suisse. The Brazilian government has already expressed opposition to an outright takeover of the company.
If Boeing were to acquire Embraer, it would be the largest such acquisition for the company since it purchased McDonnell Douglas Corp. in 1997. But even a partnership would give Boeing a strong foothold in the 100-seat segment. Airbus recently took control of Bombardier's C Series program, which is the subject of a trade dispute filed by Boeing with the U.S. Government.
(Source: Boeing news release and as cited. Image from file)
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