The plane-maker’s board has backed a sale of its commercial aviation division, following government approval in Brazil.
Consolidation continues among the few players in the global aircraft manufacturing business. Following a similar deal between Airbus and Bombardier last year, the board of the Brazilian plane-maker Embraer has authorized the company to implement a proposed partnership with Boeing.
Getting approval from Brazil’s government, Embraer will now sign a master transaction agreement on partnership in commercial aviation, plus a deal to create a joint venture that will manage development of the KC-390 aircraft, the news agency Reuters reports.
The deal, which initially came to light last summer, must still be voted on by Embraer’s private shareholders in the next 30 days, and regulatory approval is also necessary, but Brazilian government support had been seen as the biggest hurdle.
A press release by the two companies stresses that the deal will “maintain the current jobs in Brazil”. This is a new pledge, seen as crucial to winning government and union backing.
In the deal, Embraer will sell 80% of its profitable commercial aircraft division to Boeing for $4.2 billion, and the US giant will have total control of the new venture.
Embraer and Boeing say they expect the agreement will receive its final approvals by the end of the year.