Industry Boeing and Embraer partnership takes shape

The strategic partnership between Boeing and Embraer is taking shape. Both manufacturers are working closely to establish their cooperation.

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Since receiving the shareholder approval for the partnership in February, the companies have undertaken detailed planning for the creation of a Joint Venture (JV). This JV will be made up of the commercia aircraft and services operations of Embraer, of which Boeing will own 80 percent. Over this course, a new company will be established, named Boeing Brazil – Commercial.

The whole transaction remains subject to regulatory approval. Both companies are in talks with all relevant authorities and have obtained a number of regulatory approvals already. The U.S. Federal Trade Commission has released a detailed assessment and the parties´ strategic partnership has been given the clearance to close in the United States. The European Commission on the other hand indicated that it will open a Phase II assessment to review the transaction.

Based on these recent developments, Boeing and Embraer expect the transaction to close in early 2020. The companies are already working together to prepare a joint venture that promotes and develops markets for the KC-390 aircraft. Embraer will hold 51 percent of this programme, while Boeing will own 49 percent.

In a statement, Embraer and Boeing wrote: "The comprehensive Boeing-Embraer strategic partnership, embodied through these two joint ventures, will position the companies to compete in the global marketplace, to deliver greater value to customers, and to boost the Brazilian aerospace industry as a whole."

In December 2018, Boeing and Embraer have released that both sides have approved the terms of their strategic partnership. Back then, the manufacturer said that they hope to be generating annual synergies of about US$ 150 million by the third year of operation.

The initial partnership was announced in July 2018, shortly after Airbus had acquired the CSeries program from Bombardier. Meanwhile, Airbus has started to deliver CSeries aircraft and is also building a production site in Alabama, United States.

With Boeing´s acquisition of the E2-program of Embraer, the manufacturer hopes to be a serious counterpart to Airbus´ successful A320neo family. After the 737 MAX crisis, Boeing has lost market share and value.

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