The European Commission has paused its review of Boeing's pending combination with Embraer's commercial aircraft division for a second time, again demanding more information on the new joint-venture from the prospective partners.
Boeing Brasil-Commercial, as the new venture is called, aims to produce twin-engine narrow-body aircraft for the commercial aviation "mid-market," meaning high-volume commuter and regional routes. Boeing will hold an 80% share and Embraer will control the other 20%.
The $4.2-billion deal has been approved already by directors and shareholders of both companies. The Federal Aviation Administration and regulators in China and Japan also have cleared the combination. Brazilian regulators have yet to approve the deal.
The EC is European Union's antitrust regulatory agency. It resumed its investigation into the new company earlier this month, having suspended the process in November because the petitioners had not supplied sufficient information about the commercial implications of the new company.
In September, when the EC announced plans to extend the initial review of the merger, it expressed concern that combining Boeing and Embraer would leave airline customers with only two options for purchasing 100- to 150-passenger aircraft, the other choice being Airbus with its A220 program. Potential alternatives by aircraft manufacturers in China, Japan, and Russia are not yet viable.
Reportedly, it asked Boeing to deliver over 1.5 million pages of information and data on aircraft sales.
Missing information is the same reason given for the current delay. “This procedure in merger investigations is activated if the parties fail to provide, in a timely fashion, important information that the commission has requested from them,” according to an EC statement.
When it resumed the inquiry on January 6, the Commission set April 30 for its decision on the combination. It will set a new date for delivering its decision once the requesting information has been provided, the EC explained.
Boeing had originally set the end of 2019 for the launch of Boeing Brasil-Commercial.
“We continue to cooperate (with the EC) as they progress their assessments and look forward to a positive outcome,” according to a Boeing statement.
