Brazilian Federal Court blocked the Embraer’s takeover by the US aircraft manufacturer Boeing through the creation of a joint venture.
The deal to create a joint venture for the production of regional airliners on the basis of the Embraer commercial aircraft division was announced in July this year when the companies entered into a preliminary agreement. According to the agreement, Boeing should own 80% of the shares of the company, while Embraer will have 20% stake. The commercial segment of the Brazilian company was valued at 4.75 billion USD. After closing the transaction, the operational management of the joint venture would go to Boeing.
The lawsuit was filed by four congressmen from the left Labor Party of Brazil against the state-owned Embraer. The plaintiffs demanded to freeze the negotiations on the deal, fearing that it would worsen the conditions of the Brazilian workers.
Judge Victorio Giuzio Neto doubted that the proposed deal would be useful for Embraer.
“The reason is very simple, Boeing doesn’t give up anything in this transaction, while Embraer refuses its profitable business unit”, he noted in his opinion.
