Boeing prepares to fight Bombardier’s CSeries aircrafts through a joint venture with Brazilian aircraft maker Embraer

While Airbus has sided with Bombardier, in the Canadian aircraft maker’s dispute with Boeing, through this proposed joint venture with Embraer, Boeing aims at becoming the leader in the 70-seat to 130-seat regional jet market.

Brazilian newspaper O Globo reported, without citing any sources, Boeing Co will hold a 51% stake in a joint company currently being negotiated with Embraer, a Brazilian aircraft maker.

As per the report, Boeing has agreed to the Brazilian government’s demand that it holds no more than 51% controlling share in the company.

While Boeing did not respond to a request for comment, Embraer declined to comment on the matter.

Boeing is seeking the approval of the Brazilian government to enter into a partnership with Embraer, excluding its defense unit, in order to create a company whose sole focus will be commercial aviation.

Boeing’s proposal included it having a controlling stake in the range of 80% to 90% in the newly created venture.

Incidentally, Embraer is the world’s third biggest planemaker and the leader in the 70-seat to 130-seat regional jet market.

Boeing’s tie-up proposal would see it becoming the market leader in the smaller passenger jet market and thus raise the hurdle for the CSeries aircrafts coming from Canada’s Bombardier Inc, which has the backing of Airbus SE.

Boeing’s initial plans, to completely buy over Embraer was rejected by the Brazilian government since it did not want a foreign company to control its defense unit.

The Brazilian government holds a so-called golden share in Embraer, a former state enterprise, which provides it veto powers over strategic decisions, including Boeing’s proposal for a joint venture.

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Categories: Creativity, Economy & Finance, Entrepreneurship, HR & Organization, Strategy

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