The Boeing Embraer partnership has hit another milestone as they have received unconditional approval by the Administrative Council for Economic Defense (CADE)’s General-Superintendence (SG) in Brazil. The decision will be finalized within 15 days, assuming there are no requests by any of the CADE Commissioners for a further review.
The two companies now await approval from the European Commission before the deal can be set in stone.
“This latest clearance is yet another endorsement of our partnership, which will bring greater competition to the regional jet marketplace, better value for our customers and opportunities for our employees,” said Marc Allen, Boeing’s president of Embraer Partnership & Group Operations.
“Brazil’s approval of the deal is a clear demonstration of the pro-competitive nature of our partnership,” said Francisco Gomes Neto, president and CEO of Embraer. “It will not only benefit our customers, but also allow the growth of Embraer and the Brazilian aeronautical industry as a whole.”
Assuming all goes well with the European Commission, two joint ventures will be formed. The first will be made up of the commercial aircraft and services operations of Embraer (Boeing Brasil – Commercial). Boeing will own 80% with Embraer holding on to the remaining 20% of the company stake. This partnership will allow for the company to better market its line of E-Jets (and develop its proposed turboprop) under the Boeing name, giving them both more power to compete with Airbus and Bombardier.
The second JV will be set up to promote and develop markets for the multi-mission medium airlift C-390 Millennium (Boeing Embraer – Defense) in which Embraer will own a 51 percent stake and Boeing will own the remaining 49 percent.
There have been rumors that Boeing could also shift some of its production lines of main line aircraft to Brazil to save on labor costs.
Unfortunately the deal is still to be finalized as the European Commission still has to give its vote. The approval process was put on hold in November 2019 as they were unable to ascertain requested information in a timely manner. With that said, the partners have responded saying:
“We have been productively engaged with the Commission to demonstrate the pro-competitive nature of our planned partnership, and we look forward to a positive outcome,” Boeing’s Allen said. “Given the positive endorsement we’ve seen from customers across Europe and the unconditional clearance we’ve received from every other regulator who has considered the transaction, we look forward to securing final approval for the transaction as soon as possible.”