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Possible tie up between Boeing and Embaer

Sundog

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Now that Airbus and Bombardier are tied together through the C series, Boeing is looking at a tie up with Embraer, in a counter move to Airbus's latest action.

Boeing explores Embraer tie up
 

GTX

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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.

(ends)


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.

-ends-
 

sferrin

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Hope they do. Then they could put the 390 up as a C-130 replacement.
 

Arjen

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http://www.chicagotribune.com/business/ct-biz-brazil-president-embraer-boeing-20171222-story.html
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.
 

sferrin

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Bummer. Where Embraer is a crown jewel for Brazil though I guess that shouldn't be a surprise. A shame the US didn't do the same for Allison Advanced Development and United Defense (which were snapped up by RR & BAE respectively).
 

Hood

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I don't see what Embraer would get out of a deal with Boeing beyond giving up its hard-fought market share and possibly having its commercial ambitions muzzled by Boeing.
Unless both were going to develop a new product out of the partnership its nothing more than sticking Boeing labels on the E-series and maybe bolstering its BBJ lineup. The A-29 likely doesn't have much future as a potential A-X type and FMS programmes to third-party states is a limited market. The KC-390 doesn't seem to catching the C-130 replacement market alight yet, it could be argued its as much a dead-end prestige project as Japan's C-2.

Boeing seems determined to smother its competitors one way or the other. Effectively trying to take over a entire nation's aviation industry to fill one segment of the airliner market seems rather cynical to me. If Boeing really thinks the 70-100 market is so big that it stands to loose so much then why doesn't it just design a new aircraft for the market or a proper 737 replacement?
 

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Ask Airbus what kind of future they have in mind for Embraer. ;)

A merger with Boeing could have been done with a provsion of guarantee.
The 390 would have had certainly a bright future under SoC and the gremlin program. It's the only clean platform with c-130 size and volume that does not suffer from propwash
 

Hood

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Re: Possible tie up between Boeing and Embraer

The details of Boeing's deal with Embraer have been released.
Boeing now has complete control of the Embraer's commercial aircraft unit (covering ERJs, E-Jets and E-Jets E2) as a "fully-integrated subsidiary", leaving Embraer with its executive jet and defence businesses, although a Boeing-Embraer KC-390 joint venture is still under consideration.

https://www.flightglobal.com/news/articles/embraer-boeing-agreement-lays-out-terms-of-proposed-452616/
 

Moose

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My understanding is that the KC-390 deal has been roughed out but will not proceed until there's a US Gov order done or very likely.
 

TomS

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Moose said:
My understanding is that the KC-390 deal has been roughed out but will not proceed until there's a US Gov order done or very likely.
So, never...
 

sferrin

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TomS said:
Moose said:
My understanding is that the KC-390 deal has been roughed out but will not proceed until there's a US Gov order done or very likely.
So, never...
If the US could license produce it maybe it wouldn't be never.
 

TomS

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sferrin said:
TomS said:
Moose said:
My understanding is that the KC-390 deal has been roughed out but will not proceed until there's a US Gov order done or very likely.
So, never...
If the US could license produce it maybe it wouldn't be never.
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

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TomS said:
sferrin said:
TomS said:
Moose said:
My understanding is that the KC-390 deal has been roughed out but will not proceed until there's a US Gov order done or very likely.
So, never...
If the US could license produce it maybe it wouldn't be never.
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.
Something that big would be overkill for the USMC and US Special Forces.
 

TomS

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sferrin said:
Something that big would be overkill for the USMC and US Special Forces.
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.
 

fightingirish

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o_O
 

Hood

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That is a shocker. Guess the financial impact of the MAX problems and the shutdowns due to the current Coronavirus pandemic meant Boeing have had to backtrack on its commitment.
Embraer would be understandably peeved at being used as a scapegoat and they are probably quite relieved that they have dodged a bullet.
 

kaiserd

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If you look at the agreed price versus current value then the exit penalty looks very reasonable...
 

TomcatViP

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I wonder if the political situation in Brazil did not have an impact on the decision (Moro decision to leave the government). I hope that we have some Brazilians member here to share their views.
 

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Oh well ... and who would be the winning third? Again Airbus or this time China?
 

TomcatViP

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Why would China as a country want Embraer? A Chinese investor maybe but it would be hard to see the synergies that could benefit Embraer.
 

Deino

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Why would China as a country want Embraer? A Chinese investor maybe but it would be hard to see the synergies that could benefit Embraer.

Since there already was or is a close cooperation i think with Harbin and in mind that they try to get a foot into the doorstep in so many companies ... just look what happened with the Austrian Diamond company. I agree that it won't become a Chinese company merged into AVIC or COMAC, but as a major shareholder, its main investor maybe?
 

gral_rj

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I wonder if the political situation in Brazil did not have an impact on the decision (Moro decision to leave the government). I hope that we have some Brazilians member here to share their views.
Don't think it did. Moro's decision to leave matters less for Boeing than the current pandemic.
 

riggerrob

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TomS said:
sferrin said:
TomS said:
Moose said:
My understanding is that the KC-390 deal has been roughed out but will not proceed until there's a US Gov order done or very likely.
So, never...
If the US could license produce it maybe it wouldn't be never.
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.
Something that big would be overkill for the USMC and US Special Forces.

Special Forces tend to deploy fewer troops at longer ranges to small airstrips than conventional troops. KC-90's longer range and faster cruise give it an advantage over C-130.

As for cargo cross-section, KC-90 matches that of the most popular airplane in its class: C-130.
Limiting cargo cross-section also limits weight of which armoured vehicles can be carried.
Perhaps AFVs need bolt-on armour to rapidly adapt to the latest road-side bombs deployed by Taliban, Al Queda, ISIS, etc.
perhaps they need quick=fold slat armour to protect against RPGs.
I am thinking in terms of the semi-monocque "punt" lower hull of a Saracen wheeled-APC that is proof against medium-sized anti-tank mines.
Various bolt-on armour kits protect it against this week's fashion in road-side bombs. Unbolt the extra armour, strap it to a pallet and shove it inside the KC-90. Bolt the extra armour back on after un-loading the AFV hull. If KC-90 includes a ceiling cargo gantry, that can help speed the re-assembly process.
That leaves Al Queda guessing - for a few days - about how much explosive they need to destroy this week's fashion in "infidel" AFVs.
 

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