Embraer
The proposed joint venture would supply narrow-body jets for the commercial aircraft “mid-market,” including some commuter and regional aircraft routes now served by the Boeing 737 and Embraer E-Jet series.

Investor Asks EC to Block Boeing-Embraer Combo

Dec. 6, 2019
A Brazilian investor wants the European Commission to reject the proposed joint-venture, to preserve competition

A Brazilian investor has asked the European Commission to block the pending combination of Boeing with Embraer's commercial aircraft division, a $4.2-billion deal already approved by directors and shareholders of both companies. The EU's antitrust regulatory agency is reviewing the combo, a process that already has delayed to the closing date scheduled for late this year.

The Federal Aviation Administration and regulators in China and Japan also have approved the combination.

The new company, Boeing Brasil-Commercial, is intended to serve the commercial aviation "mid-market," meaning high-volume commuter and regional routes.

"Embraer airplanes are competitors of Boeing airplanes. What will be left from Embraer won't survive, and even if it was possible to survive, Embraer wouldn’t be able to produce any aircraft with 50 passengers or more," according to Aurelio Valporto, the investor who has called for the EC to reject the combination.

Boeing's acquisition faced strong political opposition in Brazil earlier this year, in connection with that government's controlling interest in Embraer. The government approved the sale of Embraer's commercial aircraft division, and Embraer is slated to hold a 20% stake in Boeing Brasil-Commercial. Embraer will continue to manufacture military and business aircraft.

In September, when the EC announced plans to extend the initial review of the combination, 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.

In October the EC suspended the review, stating it required more information than the Boeing and Embraer had provided.

Earlier the prospective partners reset their closing date for venture to "early 2020", while the EU anti-trust regulatory body indicated a February 20 completion date for its review. Later, the Commission reset that date to March 5.

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