In Brazil, the protracted effort by The Boeing Co. and Embraer S.A. appears back on track after a federal judge Therezinha Cazerta rejected last week’s court ruling that blocked the government from voting to authorize a sale of its Embraer holding. This is the second time that the judiciary has overruled impediments to the case, both responding to rulings that agreed with labor and left-wing efforts to prevent the sale to a new, Boeing-controlled joint venture.
The judge accepted an appeal by Brazil’s solicitor general, arguing in behalf of Boeing and Embraer, that the injunction blocking the sale would hurt the economy, and signaled the government’s ability to interfere in free markets.
On December 17, Boeing and Embraer announced the final terms of their joint-venture plan, which has been in negotiation for over a year. They will form a $5.26-billion company with Boeing holding 80%, but centered in Brazil, producing aircraft for the commercial aircraft “mid-market,” meaning for 70-150 passengers. Presently, this includes the Embraer E-Series and newer E-Jet E2 twin-engine narrow-body jets. Strategically, for Boeing, the addition of Embraer would counter rival Airbus’ consolidation of the Bombardier C-Series medium-range product line.
Embraer is a private company in which the Brazilian government holds a minority stake. That holding is described as "the golden share" because it allows the government to control any change in the firm’s ownership.
The final agreement is now submitted for debate and approval by the government. Its decision is expected within 30 days.
