Boeing has confirmed today that it has terminated plans with Embraer to launch a joint venture. The US aircraft manufacturer said it ha sdiscontinued its Master Transaction Agreement (MTA) with Embraer in which both manufacturers would partner.
While Boeing describes this as a 'partnership', the deal includes a takeover of Embraer's commercial aviation business in what is believed to be a strategic move to compete against Airbus' Bombardier C Series program takeover. In the deal, Embraer's commercial aviation division was to be named Boeing Brasil–Commercial.
Marc Allen, president of Embraer Partnership & Group Operations said: "Boeing has worked diligently over more than two years to finalize its transaction with Embraer. Over the past several months, we had productive but ultimately unsuccessful negotiations about unsatisfied MTA conditions. We all aimed to resolve those by the initial termination date, but it didn't happen."
He continued: "It is deeply disappointing. But we have reached a point where continued negotiation within the framework of the MTA is not going to resolve the outstanding issues."
Boeing said that both parties had received unconditional approval permission from all relevant all necessary regulatory authorities except from the European Commission. 24 April was the initial termination date which could've been extended by either manufacturer if conditions were met.
In late 2018, Embraer and Boeing officially announced the joint venture. The agreement would see Boeing would takeover 80% of Embraer's commercial aircraft division for $4.2 billion subject to approval by the Brazilian government.
The new Brazilian government, on 10 January 2019, approved the partnership. A month later, on February 26, Embraer's shareholders approved the deal and controversy was sparked - antitrust reviews were sparked in Brazil, the EU, the US and China. Many believe the $4.2 billion paid by Boeing was cheap compared to Airbus' C Series takeover.
Originally, the transaction was to close in early 2020, a date which was postponed to March 2020 and then to 23 June.
The announcement today also means that the joint venture to promote and develop new markets for the C-390 Millennium aircraft is also cancelled.