Boeing and Embraer Confirm Discussions on Potential Combination
(Source: Boeing Co.; issued Dec 21, 2017)
CHICAGO & SAO PAULO --- The Boeing Company and Embraer today 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.
Boeing In Talks to Buy Brazilian Aircraft Maker Embraer
(Source: Deutsche Welle German Radio; posted Dec 22, 2017)
Shares in Brazil's Embraer have soared 20 percent after Boeing confirmed it is in talks to merge with its smaller rival. But the Brazilian government, which is a shareholder, is lukewarm about any possible takeover.
Boeing and Brazil's Embraer confirmed late on Thursday they are in talks on a "potential combination" that would allow the US aerospace giant to compete with other rivals in the 70-100 seat jet market.
Embraer, who in 2016 had revenues of $6.2 billion (€5.2 billion) , manufactures commercial, military, executive and agricultural aircraft, and already collaborates with Boeing on the KC-39 military plane. They also work together on runway safety and alternative jet fuel projects, among others.
Boeing — who notched revenues of $96 billion in the same year - is keen to fill a gap in its fleet with regional single-aisle planes made by Embraer. But some analysts warned the tie-up would not necessarily be a good fit for the Brazilian firm's Executive Jet and Defense divisions.
The latest discussions follow two previous attempts by Boeing to buy Embraer, which were rejected by the Brazilian government, which has a veto over any change of ownership despite the planemaker's privatization in the mid-1990s.
Although Brazilian President Michel Temer is focused on reducing the state’s interest in several industries, he has ruled out a full foreign takeover of Embraer, one of the country’s flagship companies.
Embraer fortunes took off when the planemaker entered the 70-100 seat regional jet market in the 1980s
Unions have meanwhile warned that the jobs of 16,000 people employed by the Brazilian firm would be at risk from any deal, and the steelworkers' union in particular has vowed to veto the sale.
Brazil's president rejects selling Embraer to Boeing
Brazilian President Michel Temer has rejected selling control of jet-maker Embraer to Boeing.
The Brazilian company confirmed Thursday that it is in talks with Chicago-based Boeing regarding a possible deal.
But the Brazilian government has veto power over a change in controlling interest in Embraer, one of the largest makers of midsize aircraft in the world.
At a breakfast with media in Brasilia on Friday, Temer said the government would welcome an infusion of foreign capital into Embraer but would not consider ceding majority control.
Temer also said the two companies had not previously informed him that they were in talks.
Boeing's approach to Embraer is seen as a response to competitor Airbus, which has plans to buy a majority stake of Canadian jet-maker Bombardier.
Right now, the C-390 is positioned as a slightly faster alternative to the C-130. I just can't see the US replacing the C-130 without going to a larger cargo cross-section, since that is often the main limiting factor in what can fly on a Hercules. I suspect anything that replaces the Hercules will need to be closer to the A400 or An-70 in internal dimensions.sferrin said:
Something that big would be overkill for the USMC and US Special Forces.TomS said:Right now, the C-390 is positioned as a slightly faster alternative to the C-130. I just can't see the US replacing the C-130 without going to a larger cargo cross-section, since that is often the main limiting factor in what can fly on a Hercules. I suspect anything that replaces the Hercules will need to be closer to the A400 or An-70 in internal dimensions.sferrin said:
If the Marines want to airlift their new ACV, which is likely to replace the LAV as well as the AAAV, they'll need to go up to something larger than a C-130.sferrin said:Something that big would be overkill for the USMC and US Special Forces.