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American plane giant Boeing and Brazil’s Embraer have agreed the terms of the joint venture which will create a strategic partnership to target growth in the global aerospace market.
- The partnership, in which Boeing will have an 80% stake and Embraer 20%, will comprise the current commercial aircraft and services operations, which will be hived off from Embraer S.A., the Brazilian aerospace conglomerate which produces commercial, military, executive and agricultural aircraft, and provides aeronautical services.
- The cost of Boeing’s 80% share is US$4.2 billion. The partnership is expected to be neutral to Boeing’s earnings per share in 2020 and accretive thereafter.
- The new company will be headed by Brazilian-based management, with Boeing having operational and management control, both reporting directly to Dennis Muilenburg, Boeing chairman, president and chief executive officer.
- The companies have also agreed to the terms of another joint venture to promote and develop new markets for the multi-mission medium airlift KC-390 where Embraer will own a 51% stake and Boeing the remaining 49%.