Read on Twitter
1/ On 25 April, @Boeing announced it suspends the $4.2bn deal with Brazilian @embraer to form a joint-venture in civil aviation business. It is however committed to maintain plan to joint-venture in marketing of KC-390 military transport aircraft. https://boeing.mediaroom.com/2020-04-25-Boeing-Terminates-Agreement-to-Establish-Joint-Ventures-with-Embraer?sf233206179=1 Thread:
2/ This is a worrisome news for @embraer in current economic/covid-19 context, but for some in Brazil (especially military) it could be a chance to take control over the country’s privatization process. https://www1.folha.uol.com.br/mercado/2020/04/fim-de-acordo-boeing-embraer-e-chance-de-brasil-ter-cautela-com-privatizacoes-dizem-militares-do-governo.shtml
3/ #Boeing explained, #Embraer had not fulfilled the Master Transaction Agreement (MTA) terms. #Embraer responded the cancellation was not valid and it would seek full compensation of damages related to the decision (estimated 2019 costs of separating its businesses at $87m)
4/ Embraer claims that Boeing took a pattern of continuous delays and violations of the MTA due to the lack of will to conclude transaction, its financial conditions, as well as commercial and reputational issues related to 737 MAX among others. https://www1.folha.uol.com.br/mercado/2020/04/boeing-desiste-de-comprar-area-de-aviacao-comercial-da-embraer.shtml
5/ Moreover, Embraer negotiators believe there were signals since the Covid-19 outbreak that Boeing was close to withdraw from the deal. They believe Boeing found false excuse to not fulfil its commitments and avoid paying fines
6/ What was still pending for the Boeing-Embraer deal to conclude was the green light from the European Commission, which planned to decide on 7 August this year – both companies saw that delay as a way to protect Airbus https://ec.europa.eu/commission/presscorner/detail/en/IP_19_6007 https://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code=2_M_9097
7/ In Poland, Embraer and Boeing are involved in the Ministry of Defence’s technical dialogue on the supply of medium-sized transport aircraft. https://www.pism.pl/publications/The_Significance_of_the_ProUS_Stance_in_Brazils_Defence_Policy /end of thread
