Boeing of the US and Embraer of Brazil on Thursday announced they have signed a memorandum of understanding to establish a strategic partnership that positions both companies to accelerate growth in global aerospace markets.
The non-binding agreement proposes formation of a joint venture comprising the commercial aircraft and services business of Embraer that would strategically align with Boeing’s commercial development, production marketing and life cycle services operations, the announcement said.
Under terms of the agreement, Boeing will hold an 80 percent ownership stake in the joint venture and Embraer will own the remaining 20 percent stake.
“By forging this strategic partnership, we will be ideally positioned to generate significant value for both companies’ customers, employees and shareholders and for Brazil and the United States,” said Dennis Muilenburg, Boeing’s chairman, president and chief executive officer.
“The agreement with Boeing will create the most important strategic partnership in the aerospace industry, strengthening both companies’ leadership in the global market,” said Paulo Cesar de Souza e Silva, Embraer chief executive officer and president.
The transaction values 100 percent of Embraer’s commercial aircraft operations at USD 4.75 billion, and contemplates a value of USD 3.8 billion for Boeing’s 80 percent ownership stake in the joint venture.
The strategic partnership will bring together more than 150 years of combined leadership in aerospace and leverage the two companies’ highly complementary commercial product lines, the announcement said.
On finalization, the venture will be led by Brazil-based management, including a president and chief executive officer. Boeing will have operational and management control of the new company, which will report directly to Muilenburg.
Source: Kuwait News Agency