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Embraer's stock price jumped more than 20% in New York and São Paulo. The market capitalization of the company at the close of trading was $ 4.5 billion after the statement, in which there were no details about the possible transaction. Shares of Boeing decreased by almost 1%.
The Brazilian government, which has the power to veto strategic decisions regarding Embraer, will support the partnership with Boeing in commercial aviation, but it will block any attempts at takeover, a senior government official told Reuters.
As reported earlier, in October the European aircraft manufacturer Airbus SE agreed to acquire a controlling stake in Canadian Bombardier Inc. for the production of C Series aircraft. These liners are direct competitors of Embraer's E-Jet aircraft.
For decades, Bombardier and Embraer have competed in the segment of regional airplanes for 70-100 seats, while Airbus and Boeing produced large airliners. The Alliance Airbus and Bombardier could break the balance.
Boeing has twice approached Embraer with a proposal for a deal more than a decade ago. However, these proposals were rejected because of the government's veto, the source said to Reuters.
Last year, Michel Temer assumed the presidency of Brazil with a market-friendly agenda aimed at privatizing state-owned enterprises and reducing political influence in such state-owned companies as the oil company Petroleo Brasileiro SA.
Nevertheless, foreign control over the aircraft manufacturer, important for the industry of Brazil, may be undesirable even for Temer, notes Reuters.
Boeing is ready to take measures to preserve the Embraer brand, management and jobs in order to get approval from the Brazilian government, and is also prepared to structure the deal so as to maintain the government's share in the Embraer business of manufacturing military aircraft, The Wall Street Journal reported.
source: reuters.com
The Brazilian government, which has the power to veto strategic decisions regarding Embraer, will support the partnership with Boeing in commercial aviation, but it will block any attempts at takeover, a senior government official told Reuters.
As reported earlier, in October the European aircraft manufacturer Airbus SE agreed to acquire a controlling stake in Canadian Bombardier Inc. for the production of C Series aircraft. These liners are direct competitors of Embraer's E-Jet aircraft.
For decades, Bombardier and Embraer have competed in the segment of regional airplanes for 70-100 seats, while Airbus and Boeing produced large airliners. The Alliance Airbus and Bombardier could break the balance.
Boeing has twice approached Embraer with a proposal for a deal more than a decade ago. However, these proposals were rejected because of the government's veto, the source said to Reuters.
Last year, Michel Temer assumed the presidency of Brazil with a market-friendly agenda aimed at privatizing state-owned enterprises and reducing political influence in such state-owned companies as the oil company Petroleo Brasileiro SA.
Nevertheless, foreign control over the aircraft manufacturer, important for the industry of Brazil, may be undesirable even for Temer, notes Reuters.
Boeing is ready to take measures to preserve the Embraer brand, management and jobs in order to get approval from the Brazilian government, and is also prepared to structure the deal so as to maintain the government's share in the Embraer business of manufacturing military aircraft, The Wall Street Journal reported.
source: reuters.com
