The European Commission suspended its review of Boeing’s acquisition of Embraer’s commercial aircraft division and the pending establishment of the Boeing Brasil-Commercial joint venture, stating it required more information than the petitioning companies have provided. Early last month 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, it reset that date to March 5.
“(The) parties must supply the necessary information for the investigation in a timely fashion,” according to a statement by the EC. “Failure to do so will lead the commission to stop the clock.”
It is not known what further information the EC may require before resuming the inquiry, or how much longer the review may continue.
Boeing, which is set to hold 80% of the venture, stated through a representative together with Embraer it “continue(s) to co-operate with the European Commission as they assess our transaction and look forward to a positive resolution.”
Boeing Brasil-Commercial is intended to serve the commercial aviation "mid-market," meaning high-volume commuter and regional routes. The $4.2-billion purchase and new venture launch has been approved by shareholders of both companies, and had been set to close by the end of 2019.
When it announced plans to extend the initial review of the combination, the EC expressed concern that combining Boeing and Embraer would leave airlines 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.
Boeing’s strategy in acquiring Embraer has been to counter the competition of the A220, which is the result of the Airbus takeover of the former Bombardier C Series.
The U.S. Federal Trade Commission has already cleared the joint venture to close in the U.S., following a "detailed assessment," as noted in a joint statement by Boeing and Embraer.
In their joint statement, Boeing and Embraer explained that they continue to work together "to establish their strategic partnership, positioning both companies to deliver greater value to airline customers and the flying public, and to accelerate growth in global aerospace markets."