By Lise Alves, Senior Contributing Reporter
RIO DE JANEIRO, BRAZIL – A joint venture between Brazil’s Embraer and US’s Boeing was approved on Tuesday by 96.8 percent of the Brazilian aircraft manufacturer’s shareholders. The partnership calls for the creation of a new company, where Boeing will own eighty percent of the shares and Embraer the remaining twenty percent.
“This groundbreaking partnership will position both companies to deliver a stronger value proposition for our customers and other stakeholders and create more opportunities for our employees,” said Paulo Cesar de Souza e Silva, President and CEO of Embraer in a note sent out to investors after the shareholders’ meeting.
According to Souza e Silva, the partnership will create mutual benefits and boost the competitiveness of both aircraft manufacturing companies.
“Approval by Embraer’s shareholders is an important step forward as we make progress on bringing together our two great aerospace companies,” said Dennis Muilenburg, Boeing chairman, president and CEO.
“This strategic global partnership will build on Boeing’s and Embraer’s long history of collaboration, benefit our customers and accelerate our future growth,” added the executive.
During Tuesday’s meeting Embraer shareholders also approved the creation of a joint venture to promote and develop new markets for the KC-390 multi-mission aircraft. Under the terms of the proposed partnership, Embraer will hold 51 percent of the joint venture’s shares and Boeing, the remaining 49 percent.
In December of 2018 the two aircraft giants announced they had approved the terms for the joint ventures. In January of 2019, one of President Jair Bolsonaro’s first decisions as Brazil’s new leader was to approve the deal.
The closing of the transaction is now subject to regulatory approvals by both countries which Boeing and Embraer hope to achieve by the end of 2019.
With the announcement of the approval the Brazilian aircraft’s shares in the São Paulo Stock Exchange appreciated. Embraer’s stock (EMBR3) went up as much as four percent during the day on Tuesday, closing the session up by 1.54 percent at R$19.70/share.