Embraer S.A. is pledging to fight a lawsuit challenging its deal to sell its commercial aircraft business to a new joint-venture business with The Boeing Co. The litigants in the case are four congressmen from Brazil’s Workers Party who seek an injunction to halt the ongoing talks toward the joint venture announced in July, and ultimately to cancel the combination.
The memo of understanding that Boeing and Embraer announced would give Boeing an 80% ownership position over the commercial jet operations. Local management and aircraft assembly operations would remain in Brazil, and separate from Boeing’s assembly operations in the U.S.
Embraer is a private, formerly state-controlled company, but the government retains a “golden stake” that gives it veto control over ownership changes.
The proposed Boeing-Embraer combination would not include Embraer’s defense aircraft or executive jet business lines.
Labor interests in Brazil have been arguing against the Boeing proposal since it became public late in 2017. A separate challenge to the announced combination was filed in July by Brazilian labor officials, who sought guarantees that no job losses would result from the ownership change. A federal judge in that country rejected that challenge.
The combination of Boeing and Embraer may not be sealed for more than a year, according to the Brazilian company.
