It seems that Boeing and Embraer have signed a Memorandum of Understanding to establish a strategic partnership between each other to help grow in Aerospace markets.
The proposed joint venture comprising the commercial aircraft and services business of Embraer that would strategically align with Boeing’s commercial development, production, marketing and lifecycle services operations.
The splits of the agreement will have Boeing will hold an 80 percent ownership stake, whilst Embraer will own the remaining 20 percent stake.
Dennis Muilenburg, Boeing’s Chairman, President and Chief Executive Officer
“By forging this strategic partnership, we will be ideally positioned to generate significant value for both companies’ customers, employees and shareholders – and for Brazil and the United States,”
This important partnership clearly aligns with Boeing’s long-term strategy of investing in organic growth and returning value to shareholders, complemented by strategic arrangements that enhance and accelerate our growth plans,”
Paulo Cesar de Souza e Silva, Embraer Chief Executive Officer and President.
“The agreement with Boeing will create the most important strategic partnership in the aerospace industry, strengthening both companies’ leadership in the global market,”
“The business combination with Boeing is expected to create a virtuous cycle for the Brazilian aerospace industry, increasing its sales potential, production, creating jobs and income, investments and exports, and in doing so, adding more value to customers, shareholders and employees.”
The strategic partnership will bring together more than 150 years of combined leadership in aerospace. It will use the product lines that exist – from the Embarer E-Jet upwards, right through to to Boeing 777
As well as commercial aircraft, Boeing and Embraer will develop a separate joint venture for defence products and services too – inclining the KC-390 multi-mission aircraft.
It’s going to be about 18 months or so to go through this (with the obvious goverment and regualoaty hurdles to clear). Subject to approvals being granted, the transaction is expected to close at the end of 2019.
This is big – make no mistake about it. With Boeing’s sales and economies of scale, there is serious money to be saved and made.
It some ways, Airbus and Bombardier forced Boeing and Embraer’s hands (when their joint venture was set up for the C Series Holding Company).
It’s consolidation – but not as we know it.
Image – Boeing via Twitter
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