RIO DE JANEIRO, BRAZIL – Brazilian aircraft manufacturer Embraer said yesterday, April 25th, in a press release that it “firmly believes that Boeing has improperly terminated” the agreement whereby the American company would buy the Brazilian company’s regional jet unit for US$4.2 billion.
The termination of the merger had been announced earlier in the day by Boeing, which claimed that Embraer has not fulfilled all the provisions in the agreement required to complete the transaction.
“The Company believes that Boeing has consistently adopted a pattern of delay and repeated violations of the agreement due to its unwillingness to complete the transaction, its financial position, issues with the 737 MAX and other commercial and reputation issues,” Embraer says in the statement.
“Embraer believes it is in full compliance with its obligations under the agreement and that it has fulfilled all the required conditions by April 24th, 2020. The Company will pursue all appropriate measures against Boeing for damages suffered as a result of the improper termination and breach of this agreement”.
Boeing announced its decision to rescind the agreement with Embraer on Saturday morning, April 25th. The deadline for the agreement to be closed had expired the day before.
The purchase of 80 percent of Embraer’s commercial aviation unit by Boeing had been agreed almost two years ago. The Brazilian company would retain a 20 percent minority stake as a partner of the American giant. With no deal, Embraer “goes back” to being a solely Brazilian aircraft manufacturer.
Under the agreement, Boeing would pay Embraer US$4.2 billion. Payment would have to be made now, after the closing, in the midst of the sector’s liquidity crisis due to the coronavirus pandemic. An additional part of this transaction would be the creation of a joint venture to manufacture the KC-390 military aircraft.
“Boeing worked diligently for over two years to finalize the transaction with Embraer. Over the past few months, we’ve had productive but frustrating negotiations over unfinished material conditions. We all wanted to complete this by the closing date, but it didn’t happen,” says Marc Allen, president of Embraer Partnership & Group Operations. “We’re deeply disappointed.”
Source: Exame