Boeing To Pay US$ 4.2 Billion For 80% Of Embraer's Commercial Aviation Division

The Brazilian government is expected to approve the sale

Igor Gielow
São Paulo

After one year of negotiations, Boeing is close to finally purchasing Embraer's civil aviation division. The deal that will create a joint-venture worth US$ 5.26 billion will be sent to the Brazilian government's appreciation. 

The American company will pay US$ 4.2 billion, US$ 400 million more than the initial valuation, to control 80% of the new business.

In July, Boeing had disclosed that the total amount was going to be US$ 4.75 billion, a sum considered low by some analysts. However, the price increase has more to do with the two partners foreseeing that it will cost more than initially expected to extract the civil aviation division from the Brazilian airplane maker.

According to market valuations, the total amount that the "old" Embraer will receive is around US$ 3 billion. 

Embraer's stock in the São Paulo exchange rose over 7% after the announcement. At 10h12, the Ibovespa index was up 0.29%, at 87,699.81 points.

According to a joint press release, both companies will start a second joint venture to make and sell only one product for the military market, the military transport aircraft KC-390, which will also be out of the scope of the new company born from the sale.

Translated by NATASHA MADOV

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