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Embraer E-Jet series Embraer
The Embraer E-Jet series of a narrow-body, twin-engine jets are used in standard commercial routes and for regional service. The E175 seats 78 to 88 passengers, while the larger E190 and E195 jets seat 100 to 124 passengers.

Final Terms Set for Boeing-Embraer Link

Strategic partnership would be 80% controlled by Boeing; still seeking Brazilian government approval

Directors of Embraer S.A. and The Boeing Co. approved the final terms of the strategic partnership they announced in July, which will give Boeing 80% ownership in a new company. Embraer would retain 20%. The Embraer defense aircraft business would not be included in the joint venture.

Boeing’s strategy is to enhance its stake in the commercial aircraft mid-market, meaning medium-range jets for 70-150 passengers, in particular the Embraer E-Jet E2 twin-engine narrow-body jets. Such an acquisition also would counter Boeing rival Airbus’ consolidation of the Bombardier C-Series medium-range product line.

The new $4.75-billion business would consist of the current Embraer commercial aircraft and services business, which will be headquartered in Brazil but aligned with Boeing Commercial Airplanes’ commercial development, production, marketing, and lifecycle services operations. Embraer will retain consent rights for certain strategic decisions, such as transfer of operations from Brazil.

"Boeing and Embraer know each other well through more than two decades of collaboration, and the respect we have for each other and the value we see in this partnership has only increased since we announced our joint efforts earlier this year," stated Boeing chairman Dennis Muilenburg.

The transaction remains subject to approval by the Brazilian government, after which the two partners would execute the final transaction. Then, the closing would be subject to shareholder and regulatory approvals, and customary closing conditions.

The transaction is expected to close by the end of 2019. 

The sale of the Embraer business has been controversial in Brazil, where court recently enjoined the government from considering a decision, based on an appeal by left-wing congressmen. That ruling was subsequently tossed on appeal.

"We are confident that this partnership will deliver great value to Brazil and the Brazilian aerospace industry as a whole. This alliance will strengthen both companies in the global market and is aligned with our long-term sustainable growth strategy," stated Paulo Cesar de Souza e Silva, Embraer president and CEO.

The two prospective partners also agreed to the terms of a second venture to promote and develop new markets for the KC-390 twin-engine military transport jet. In this proposal, Embraer would own a 51% stake and Boeing would hold 49%.

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