Shareholders of Embraer S.A. approved the proposed consolidation of the Embraer Commercial Aviation business with The Boeing Co. in a vote taken at an extraordinary general shareholders' meeting at the company's headquarters in Brazil: with 67% of shareholders participating, 96.8% of all valid votes approved the transaction.
The goal of the combination is a new business serving the commercial aircraft “mid-market,” meaning regional jets or narrow-body aircraft for 70-150 passengers. This would include the Embraer E-Series and newer E-Jet E2 twin-engine narrow-body jets.
The new venture will be 80% controlled by Boeing and 20% by Embraer, which has been the basis for much of the opposition to the deal in Brazil.
The Embraer shareholders also endorsed a separate joint venture that will promote and develop the KC-390 multi-mission medium-airlift helicopter. In that venture, Embraer will own a 51% stake and Boeing will hold 49%.
"This strategic global partnership will build on Boeing's and Embraer's long history of collaboration, benefit our customers and accelerate our future growth," stated Boeing chairman, president, and CEO Dennis Muilenburg.
Strategically, for Boeing, adding the Embraer business would counter rival Airbus’ consolidation of the Bombardier C-Series medium-range product line.
"This groundbreaking partnership will position both companies to deliver a stronger value proposition for our customers and other stakeholders, and create more opportunities for our employees," stated Paulo Cesar de Souza e Silva, president and CEO of Embraer.
The “strategic partnership” was announced in late 2017 and defined in July 2018. Together, Boeing and Embraer approved the terms for the joint ventures, and the Brazilian government gave its approval in January 2019 (after several attempts to block the government from selling its interest in the business were overturned.)
The transaction values 100% of Embraer's commercial aircraft operations at $5.26 billion, and projects Boeing’s 80% stake in the joint venture will be valued at $4.2 billion.
The next step to forming the new business involves gaining regulatory approvals and satisfying customary closing conditions. Boeing and Embraer expect to establish the new venture by the end of 2019.