The $5.26 billion acquisition of Brazilian company Embraer by the US aircraft maker Boeing was approved by the shareholders of the former company at the company’s headquarters in an extraordinary general shareholders’ meeting.
More than 96 per cent of the valid votes at the special meeting approved the acquisition which represented about 67 per cent of the total outstanding shares of the company. The approval now leaves only regulatory approval for the establishment of a joint venture comprising of the up of the commercial aircraft and services operations of Embraer. 80 per cent stake of the new entity would be held by Boeing while the rest 20 per cent would be held by Embraer.
Another joint venture for the promotion and development of the multi-mission medium airlift KC-390 through a joint venture was also approved by the shareholders of Embraer. According to this agreement, the new entity would have 51 per cent of its stake going to Embraer while the rest 49 per cent would be owned by Boeing.
“This groundbreaking partnership will position both companies to deliver a stronger value proposition for our customers and other stakeholders and create more opportunities for our employees,” said Paulo Cesar de Souza e Silva, President and CEO of Embraer. “Our agreement will create mutual benefits and boost the competitiveness of both Embraer and Boeing.”
Boeing chairman, president and chief executive officer, Dennis Muilenburg, said about the deal: “Approval by Embraer’s shareholders is an important step forward as we make progress on bringing together our two great aerospace companies. This strategic global partnership will build on Boeing’s and Embraer’s long history of collaboration, benefit our customers and accelerate our future growth.”
Despite the acquisition, both the companies have decided to keep as a standalone publically-traded company the defense and executive jet business of Embraer’ along with the services operations that the business unit also provides. The companies said that mutual benefits and increased competitiveness between Boeing, the joint venture and Embraer would also be ensured through a series of support agreements which would focus on increasing cooperation for supply chain management, engineering and other facilities.
“Our shareholders have recognized the benefits of partnering with Boeing in commercial aviation and the promotion of the multi-mission airlift KC-390, as well as understanding the opportunities that exist in the executive aviation and defense business,” said Nelson Salgado, Embraer Executive Vice President of Finance and Investor Relations.
According to Greg Smith, Boeing Chief Financial Officer and Executive Vice President of Enterprise Performance & Strategy, there is a common sense of passion for innovation,, a commitment to excellence and a deep pride in the products and teams of the companies among the people in both the companies. He said that the two companies would be able to create an “exciting future together” because of the further strengthening of the common attributed listed above.
The deal for the joint venture was announced by Boeing and Embraer in December 2018 and the companies managed to get an approval for the venture from the Brazilian government in January of this year. The deal was then ratified by the board of directors of Embraer. The two companies hope to close the deal with all other regulatory approvals by the end of the current year.
(Adapted from PRNewsWire.com)