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28-Jan-2019 8:50 AM

Boeing/Embraer sign USD4.2bn master agreement on takeover of Embraer's commercial aircraft business

Boeing signed (25-Jan-2019) a master transaction agreement with Embraer to form 'Commercial Aviation Newco' (CAN), which will own Embraer's commercial aviation business. Details include:

  • CAN will take the role of designing, developing, manufacturing, assembling, testing, certifying, marketing, selling, delivering, maintaining, sustaining and supporting, and providing aftermarket services for, commercial aircraft platforms and programmes with 50 or more seats;
  • Embraer agreed to contribute certain assets and liabilities related to its commercial aviation business to CAN, and Boeing Brazil agreed to acquire an 80% interest in the capital stock of CAN at an aggregate value of approximately USD4.2 billion, subject to certain adjustments;
  • The agreement was signed between Boeing, Boeing Brasil Serviços Técnicos Aeronáuticos (doing business as Boeing Brazil), Embraer and Yaborã Indústria Aeronáutica, a subsidiary of Embraer (doing business as Commercial Aviation Newco);
  • Completion of the transaction is subject to customary closing conditions, including the requisite vote of the holders of the Embraer shareholders, including of the "golden share" of the Brazilian Federal Government;
  • Concurrently with the master transaction agreement, Boeing and Embraer agreed to establish a JV for the promotion and development of new markets and applications for the KC-390. The KC-390 JV will be 51% owned by Embraer and 49% owned by Boeing. The formation of the KC-390 JV is subject to customary closing conditions as well as the concurrent closing of the commercial aviation transaction. [more - original PR]

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