Sao Paulo - Shareholders of the Brazilian aircraft manufacturer Embraer approved the deal handing over 80% of the company’s commercial aircraft division to Boeing.
The new deal will enable the American manufacturer to compete with Airbus in the 100 to150-seat market, who bought the majority stake of Bombardier's CSeries program last year and re-branded it as Airbus A220.
The 96.8 of the Embraer shareholders voted in favor of the deal.
Boeing will pay $4.2 billion to Embraer for 80 percent of the manufacturer's commercial aircraft division. Shareholders’ approval concludes negotiations between Boeing and Embraer paving the way to launch a new joint venture. The transaction is now subject to the approval of antitrust regulators around the world.
Bombardier and Embraer had been squeezed between two Aerospace giants due to increased competition in the narrowbody market and were forced to accept takeover bids from Airbus and Boeing to survive.
With the fresh cash flow from Boeing, Embraer will now be able to pay the company’s huge debts. But some in the South American country think that the deal will weaken Embraer due to its current position which relies on its two loss-making divisions, executive jets and defense.