Boeing Announced The Termination Of The Deal With Embraer
The American aerospace Corporation Boeing canceled the agreement to create a joint venture with the Brazilian aircraft manufacturer Embraer, according to a message posted on the Boeing website on Saturday.
"Boeing today announced the termination of the MTA agreement with Embraer, which provided for the creation of a new strategic partnership between the two companies. The parties planned to establish one joint venture with the participation of the Embraer aviation business, as well as a second joint venture to develop new sales markets for the KC-390 medium-haul aircraft. The MTA expired on April 24, 2020, and could be extended by any party if a number of specific conditions were met. Boeing exercised its right to cancel the contract after Embraer failed to meet the necessary conditions," the report said.
Boeing informed that the agreement on KC-390, signed in 2012 and extended in 2016, remains in force.
The administrative Council for economic protection (CADE) of Brazil on January 27 approved an agreement between aircraft manufacturers, which implies the creation of two joint ventures. In the first joint venture, which was to be built on the capacity of Embraer and engage in the production of medium-haul passenger aircraft, Boeing received a share of 80%, Embraer-20%. The second joint venture was to produce a military transport aircraft KC-390, in which the Brazilian company stipulated 51%, the American-49%. Previously, the cost of this joint venture was estimated at $5.26 billion.
At the end of 2018, Embraer and Boeing agreed on the terms of a joint venture deal. In early 2019, support for the merger was announced by the Brazilian authorities, who, as holders of the Golden share, had the right to veto it.
In October 2019, the European Commission (EC) opened an in-depth investigation into the deal due to concerns that the agreement could reduce competition for commercial aircraft. As Boeing clarified on Saturday, the agreement was approved without any conditions by all instances, with the exception of EC.