Boeing Terminates Joint Venture Agreement With Brazil Embraer
After Boeing announced its termination of the Master Transaction Agreement (MTA) due to unsuccessful negotiations to resolve certain terms with the deal, Embraer followed on Saturday with its own statement that Boeing was wrong to terminate its deal and avoid paying the company $4.2 billion. The two companies first signed a non-binding agreement for the creation of the joint venture almost two years ago. „Embraer believes that it fully meets its obligations under the MTA and has fulfilled all the conditions that must be met by April 24, 2020. Embraer will appeal Boing for damages suffered by Embraer as a result of Boeing`s unlawful termination and violation of the MTA. Boeing and Embraer are preparing to create a joint venture for the promotion and development of markets for the KC-390 medium multi-purpose airlift and expect all regulatory approvals for their commercial joint venture by 2020. Under the conditions. Boeing Brasil-Commercial was a planned but aborted joint venture between Boeing and Embraer to design, build and sell commercial commercial aircraft worldwide. The partnership was created in February 2019 after Boeing agreed to acquire an 80% stake in Embraer`s commercial aircraft division. The deal was approved by Embraer shareholders and was expected to be concluded by the time antitrust law is reviewed in June 2020, but in April 2020, Boeing announced the joint venture agreement due to the impact of the 2019-20 coronavirus pandemic on aviation. Embraer says the financial impact of the Boeing 737 MAX-Groundings contributed to the end of the deal, while others say U.S. labor and policy considerations played a role. On May 23, Boeing announced that the division would be known as „Boeing Brasil-Commercial,“ with the Embraer name dropped, but had not yet decided whether the plane should be renamed Boeing.  The joint venture also confirmed that the production of commercial aircraft would remain in the São José dos Campos plant, which will be acquired by Boeing Brasil.
while Embraer would relocate production of the Executive Jets Legacy 450/500 and Praetor 500/600 to the Gavião Peixoto plant.  Aviation industry publication Leeham News said the deal would be good for both companies because Boeing needed Embraer`s and Embraer`s small jets from Boeing`s marketing capability because the E-Jet E2 family was sold slowly, in part because customers were waiting for the joint venture deal to be completed and the E175-E2 was too heavy to sell in the U.S.