SAO PAULO – Brazilian aircraft manufacturer Embraer signed a contract on Thursday to sell its commercial division to US company Boeing, a deal that has yet to be approved by its shareholders.
The government of President Jair Bolsonaro gave the green light this month to the agreement between Boeing and Embraer, which foresees the creation of a new civil aviation company.
Both companies signed the deal containing the terms and conditions for the implementation of a strategic partnership in the field of commercial aviation, Embraer said in a statement.
The Brazilian company called its shareholders to a meeting on February 26 to approve the agreement, according to which Embraer will sell 80 percent of its commercial aircraft division for $4.2 billion to Boeing, which will have full control of the new company.
Likewise, the companies also agreed to develop the military cargo plane KC-390, through a second company dedicated to the promotion and development of new markets in the defense area.
According to analysts, the agreement between the two companies aims to counteract the partnership between the Canadian firm Bombardier and the European aerospace giant Airbus.
After taking office as president of Brazil earlier this month, Bolsonaro expressed doubts about the agreement between the two firms, but on January 10 announced that he would not veto the deal by considering the interests of the nation “preserved.”
The alliance needed the backing of the government, as it has a “golden share” with veto power that was kept when Embraer was privatized in 1994. Embraer is now the third-largest aircraft manufacturer in the world and leader in the segment of aircraft for regional flights.
The government said that both companies will maintain the current jobs in Brazil, but the unions said that the agreement “puts at risk the jobs and the technological sovereignty” of the country.