Published on : 04/25/2020 – 20:36
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The aircraft manufacturer Boeing gave up on Saturday April 25 to buy the civil activities of its Brazilian competitor Embraer. The Brazilian aircraft manufacturer has accused Boeing of having “illegally” renounced this takeover.
This is the latest shock for the American group, Boeing, already facing the health crisis in coronavirus and to the setbacks of the 737 MAX. The aircraft manufacturer Boeing gave up on Saturday April 25 to buy the civil activities of its Brazilian competitor Embraer.
According to a memorandum of understanding signed in July 2018, Boeing was to take control, 80% and for 4.2 billion dollars, of a joint venture including the division of Embraer producing commercial aircraft from 30 to 150 seats. A second joint venture was to be responsible for marketing the Brazilian group’s C-390 military aircraft, which also manufactures business jets.
While the transactions were to be finalized by April 24, Boeing ” exercised their right to terminate it to the extent that Embraer did not meet the necessary conditions “, Said the American group in a statement without specifying the missing criteria.
No details as to this waiver
The two companies, however, plan, according to Boeing, ” to maintain their existing agreement, signed in 2012 and extended in 2016, to jointly market and support the C-390 military transport aircraft program ” The American manufacturer does not specify the reasons for renouncing this operation, it comes at a difficult time for the aircraft manufacturer.
We announced today that we have terminated our agreement with Embraer under which the two companies planned to establish two joint ventures.
Release: https://t.co/ORq8lepNis
The Boeing Company (@Boeing) April 25, 2020
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For its part, the Brazilian accused in a press release Boeing of having renounced ” illegally »On the takeover of its civil activities. ” Embraer firmly believes that Boeing (…) used spurious arguments which he used as a pretext for not fulfilling his undertaking to conclude the transaction “, did he declare.
This merger plan was announced a few days after the partnership came into force. between Airbus and the Canadian Bombardier, which enabled the European group to take control of the CSeries medium-haul aircraft program. The transaction was to allow Boeing to compete with its main rival in the regional aircraft segment. At the same time, it was to allow Embraer to benefit from Boeing’s commercial strike force.
Bad pass for the two manufacturers
The Covid-19 pandemic has reduced air transport to fright and companies are multiplying cancellations or postponements of orders. Boeing also remains stuck in the setbacks of the 737 MAX, nailed to the ground for more than a year after two accidents that killed 346 people. The value of the company has dropped 61% on the New York Stock Exchange since the start of the year.
Embraer also goes through a bad patch. At the end of March, it had reported significant losses in the fourth quarter of 2019 and had given up on announcing targets for 2020 due to the uncertainties linked to the impact of the pandemic on the aeronautical industry. Since January, its share on the São Paulo Stock Exchange has fallen by almost 60%.
(With AFP )
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