Embraer Commercial Plane Boss Supportive of Boeing Tie-Up
24 January 2018 - 12:38AM
Dow Jones News
By Robert Wall
DUBLIN--A top executive at Brazilian plane maker Embraer SA said
Tuesday that talks about a tie-up with Boeing Co. were continuing
and that he was upbeat about closer links between two of the
world's largest airliner producers.
Boeing Co. (BA), the world's largest plane maker, and No. 3
Embraer SA (ERJ) last month confirmed a report in The Wall Street
Journal that they were in talks about combining.
Chief Executive of Embraer Commercial Aviation John Slattery
said that "as a leader of the largest business within Embraer,
commercial aviation, I am positive towards what a potential outcome
could be."
Embraer, known for making regional jets and military planes, and
Boeing had informally agreed to terms that would value the
Brazilian company at $28 per U.S. share, people familiar with the
matter said. Mr. Slattery wouldn't address details of the
negotiations, but said there were a lot of "cultural synergies"
between the two companies that have in the past cooperated on some
commercial airplane research and military projects.
The Brazilian government has signaled it would resist an
outright takeover, though. President Michel Temer said the
government wouldn't permit a change in control of Embraer, though
it would welcome new investment.
The companies are now trying to overcome the government's
resistance, which centers largely on Embraer's defense business.
The Brazilian government has a golden share in Embraer that gives
it effective veto over a deal.
Boeing is willing to take steps to protect Embraer's brand,
management and jobs, people familiar with the matter have said.
"Boeing is an organization that's deeply respected within Brazil
and within Embraer," Mr. Slattery told the annual Airline Economics
Growth Frontiers conference on Tuesday. "We now have to respect the
requirements of our government that holds a golden share," he said,
adding that "the conversations are ongoing." He wouldn't prejudge
the outcome.
The talks come as rival Airbus SE (AIR.FR) and Canada's
Bombardier Inc. (BDRBF) are working on closer ties. Airbus last
year agreed to take control of a joint venture to build
Bombardier's CSeries narrowbody plane. The deal could close by
mid-year, slightly earlier than planned, an Airbus official said
this week.
The two transactions, if they are approved, would provide the
biggest shakeup in decades in the global plane-making business.
Write to Robert Wall at robert.wall@wsj.com
(END) Dow Jones Newswires
January 23, 2018 08:23 ET (13:23 GMT)
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