You are here
Brazil judge freezes Boeing-Embraer deal, again
[SAO PAULO] A Sao Paulo judge on Thursday froze a deal between US planemaker Boeing and Brazilian company Embraer to create a US$5.26-billion joint venture at the request of Embraer unions, the state news agency Agencia Brasil reported.
It is the second time this month the judge, Victorio Guizio Neto, has suspended the tie-up.
Two weeks ago he ordered the accord be put on ice until the next Brazilian government takes over under a far-right president, Jair Bolsonaro, who assumes office on January 1.
But that decision was overturned by an appeals court four days later, and Boeing and Embraer issued a joint statement saying they were forging on with their plan, "subject to approval by the government of Brazil."
The latest injunction sent Embraer shares into the red in trading on Thursday.
Embraer, the third-largest aircraft manufacturer in the world, was founded as a state group in 1969 before being privatised in 1994. The Brazilian government retains a "golden share" giving it the right to veto strategic decisions for the company.
Under the planned deal, Boeing is to take an 80 per cent stake in Embraer's commercial business, thus allowing it to offer planes with capacity of up to 150 seats - a market in which Boeing currently does not compete.
Embraer's military aircraft business was excluded to overcome Brazilian government opposition to giving up a national security asset to a foreign entity.
When the two planemakers originally announced their deal in July this year, they said they expected to wrap up the transaction by the end of 2019.