The Brazilian manufacturer will take action for the breach
The US aircraft manufacturer Boeing has canceled the agreement to create a joint venture with the Brazilian firm Embraer in the midst of the coronavirus crisis, citing «breaches», which the second has denied in a crossroads of communications from both companies.
The deal, which was originally due to close on April 24, 2020, has been terminated «after Embraer failed to meet the necessary conditions,» Boeing said, noting disagreements in the negotiating conditions in recent months.
For its part, Embraer has maintained that «it has fully complied with its obligations under the agreement and has met all the required conditions» and will therefore take action against Boeing for damages caused by the «arbitrary» termination and violation of the agreement .
«Boeing has engaged in a systematic pattern of delay and repeated breaches of the agreement, due to its unwillingness to complete the transaction in light of its own financial situation and 737 MAX and other business and reputational issues,» said the Brazilian manufacturer.
In this sense, Embraer «firmly believes» that the breaking of this agreement under «false declarations» is a pretext to avoid its obligation to close the transaction and pay it the 4.2 billion dollars (about 3.881 million euros) of the agreed purchase price. .
Recently, Boeing asked the United States Government for aid of at least 60,000 million dollars (54,600 million euros) for the company, which employs 2.5 million people and works with 17,000 suppliers, in order to face the crisis of the coronavirus.
The planned partnership between Boeing and Embraer had received approval from all necessary regulatory authorities, with the exception of the European Commission.
Despite this announcement, Boeing and Embraer will maintain their existing agreement, originally signed in 2012 and expanded in 2016, to jointly market and support the C-390 Millennium military aircraft.
Embraer and Boeing signed an agreement to create a ‘joint venture’ valued at $ 5,250 million (4,626 million euros). The new company, dedicated to the small aircraft segment, would be 80% controlled by the American manufacturer, while the Brazilian firm would hold the remaining 20%.
In addition, they planned to launch a joint venture to promote and develop new markets for the KC-390 military cargo aircraft. In this partnership, Embraer was to have a 51% stake in the joint venture, while Boeing will have the remaining 49%.