Boeing and Embraer propose civil and military aerospace joint venture

Boeing and Embraer have proposed a joint venture that would see the US aerospace giant pay approximately $3.8bn for an 80 per cent stake in the Brazilian manufacturer of civil and military aircraft.

The companies have signed a Memorandum of Understanding to establish the strategic partnership, which will see Embraer holding the remaining 20 per cent stake.

"The agreement with Boeing will create the most important strategic partnership in the aerospace industry," said Paulo Cesar de Souza e Silva, Embraer’s president and chief executive officer. "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.”

Boeing will assume control of operations and management of the new company, which will have a Brazil-based management team.

In a statement Boeing said the joint venture will become one of its centres of excellence for end-to-end design, manufacturing, and support of commercial passenger aircraft, and will be fully integrated into the company’s broader production and supply chain.