Aircraft manufacturers disagreed over the reasons behind the end of the agreement that would have created a new aviation company
THE Embraer reported this Monday (16.Sep.2024) that it reached an agreement with Boeing to put an end to an out-of-court dispute that has been dragging on for 4 years. According to the Brazilian company, the US aircraft manufacturer will pay US$150 million (R$826.45 million) to end a transaction that would create a merger between the companies. Read the full of the statement (PDF – 95 kB).
Boeing confirmed that the arbitration process – an extrajudicial and private method often chosen to resolve disputes such as those involving commercial contracts – had been concluded, but did not disclose the amount it will pay to Embraer.
“We are pleased to have concluded the arbitration process with Embraer. More broadly, we are proud of our more than 90 years of partnership with Brazil and look forward to continuing to contribute to the Brazilian aerospace industry.”the company said.
The deal is the conclusion of a process that began in April 2020 after the U.S. company canceled a deal valued at around $4.75 billion to buy Embraer’s commercial jet manufacturing operations.
The arbitration was requested by the Brazilian company, which was trying to recover the financial losses it suffered during the preparation process for the sale.
UNDERSTAND HOW THE BUSINESS WAS
In July 2018, Embraer and Boeing announced the creation of a company in a deal valued at US$4.75 billion at the time.
The company would be Brazilian, but would be under the control of Boeing, with an 80% stake. Embraer would have 20% of the new company and would receive around US$ 3.8 billion. Read more full of the relevant fact disclosed in 2018 (PDF – 419 kB).
Already in 2020, during the procedures for the formation of the joint ventureBoeing decided to cancel the agreement and claimed that Embraer “would not have met the necessary conditions”.
On the other hand, Embraer said that the North American company terminated the contract because it was facing financial difficulties in concluding the deal and would have “fabricated false allegations” to avoid the commitments made.
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