Brazilian court suspends merger agreement between Boeing and Embraer
Sao Paulo - A Brazilian court provisionally suspended the merger agreement between US aircraft manufacturer Boeing and Embraer by the end of the year.
The decision was taken by the Federal Court of Sao Paulo and responds to an appeal filed by the Workers' Party (PT).
According to the agreement terms signed by two companies, Boeing would hold 80% of the new joint venture and Brazilian manufacturer the remaining 20%.
The judge suspended any decision of Embraer that would lead to the transfer of its commercial aircraft division to any third party.
The Sao Paulo court justified the decision as a measure to avoid “possible concrete acts” being taken before the new government comes in power under Bolsonaro administration. The new president of the country will take over duty on January 1st.
In July, Boeing and Embraer have signed a preliminary agreement to move forward with the formation of a joint venture, a new aviation company estimated at USD 4.75 billion.
Embraer is the world's third-largest aircraft manufacturer and leader in the regional jet segment.
Canadian aircraft manufacturer Bombardier sold the majority stake of its mid-sized commercial jet program to Boeing's European rival Airbus earlier this year.
The deal between Boeing and Embraer is seen as a reaction against this acquisition which boosted Airbus A220 (formerly CSeries) sales worldwide.