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Embraer-Boeing aviation deal blocked by Brazilian court
Source: Reuters
BUSINESS NEWS DECEMBER 6, 2018 / 2:46 PM / UPDATED 31 MINUTES AGO
Embraer-Boeing aviation deal blocked by Brazilian court
Ricardo Brito, Marcelo Rochabrun
3 MIN READ
BRASILIA (Reuters) - A Brazilian federal court on Thursday granted an injunction blocking the proposed tie-up between U.S. planemaker Boeing Co (BA.N) and Embraer SA (EMBR3.SA), a deal the Brazilian company says is crucial to its survival.
Embraer shares in Sao Paulo closed 2.42 percent lower, although it remained too early to say whether the injunction will actually block or significantly affect the deal. Labor groups in Brazil often bring court challenges against significant business deals and the injunction could be reversed.
The decision forbids Embraer’s board of directors from signing the deal to create a joint venture on commercial aviation that Boeing would control. Boeing declined to comment and Embraer did not immediately reply to a request for comment.
The legal action was brought by four congressmen with Brazil’s left-wing Workers Party.
The companies announced in July that Embraer would sell 80 percent of its commercial aviation business to Boeing in a deal valuing that segment at $4.75 billion. Embraer, among the world’s largest makers of mid-sized planes of up to 150 passengers, used to compete in that segment with Canada’s Bombardier Inc (BBDb.TO).
-snip-
Embraer-Boeing aviation deal blocked by Brazilian court
Ricardo Brito, Marcelo Rochabrun
3 MIN READ
BRASILIA (Reuters) - A Brazilian federal court on Thursday granted an injunction blocking the proposed tie-up between U.S. planemaker Boeing Co (BA.N) and Embraer SA (EMBR3.SA), a deal the Brazilian company says is crucial to its survival.
Embraer shares in Sao Paulo closed 2.42 percent lower, although it remained too early to say whether the injunction will actually block or significantly affect the deal. Labor groups in Brazil often bring court challenges against significant business deals and the injunction could be reversed.
The decision forbids Embraer’s board of directors from signing the deal to create a joint venture on commercial aviation that Boeing would control. Boeing declined to comment and Embraer did not immediately reply to a request for comment.
The legal action was brought by four congressmen with Brazil’s left-wing Workers Party.
The companies announced in July that Embraer would sell 80 percent of its commercial aviation business to Boeing in a deal valuing that segment at $4.75 billion. Embraer, among the world’s largest makers of mid-sized planes of up to 150 passengers, used to compete in that segment with Canada’s Bombardier Inc (BBDb.TO).
-snip-
Read more: https://www.reuters.com/article/us-embraer-m-a-boeing/embraer-boeing-aviation-deal-blocked-by-brazilian-court-idUSKBN1O52BQ
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