The Brazilian aircraft manufacturer Embraer may still enter into a close
partnership with the much larger industry partner Boeing. A federal court
in Brazil has overruled a previous court decision on blocking the proposed
deal, reports Reuters.
 
A government attorney had asked the court to declare the court order
invalid because this would be contrary to the constitutional right to
freedom of enterprise. In this way, the government would interfere in
negotiations between two private companies.
 
Left parties and trade unions in Brazil were fiercely against the deal
between Embraer and Boeing. According to the deal announced in June, Boeing
will receive a controlling share of Embraer's commercial aircraft for $
4.75 billion.
 
The Brazilian-American joint venture must counterbalance the deal that
Airbus previously concluded with Bombardier. The European aircraft
manufacturer received a majority share of the C Series aircraft program.
 
Airbus has therefore been able to strengthen its position on the aircraft
market by 100 to 150 seats. By taking an interest in Embraer, Boeing wants
to take a slice of the bottom of the market in which it is active,
particularly with the E2 series.
 
The final decision on the continuation of the deal is in the hands of the
shareholders and the government. The current Brazilian government has moved
the decision on the deal to that of the new president Jair Bolsonaro, who
will take office on January 1st. He would basically be in fqvor the deal.
Boeing and Embraer have previously said that they expect authorization from
shareholders and authorities by the end of 2019.

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