Embraer and Boeing signed a memorandum of understanding on July 5, 2018.

The non-binding agreement proposes the formation of a joint venture comprising the commercial aircraft and services business of Embraer that would align with Boeing’s commercial development, production, marketing and lifecycle services operations.Firstly Boeing will hold an 80 percent ownership stake in the joint venture and Embraer will own the remaining 20 percent stake.

Is this deal in response to the Airbus & Bombardier deal? With the two biggest rivals Airbus and Boeing vying to be the biggest aircraft manufacturers the deal is understandable.

“By forging this strategic partnership, we will be ideally positioned to generate significant value for both companies’ customers, employees and shareholders – and for Brazil and the United States,” said Dennis Muilenburg, Boeing’s Chairman, President and Chief Executive Officer. “This important partnership clearly aligns with Boeing’s long-term strategy of investing in organic growth and returning value to shareholders, complemented by strategic arrangements that enhance and accelerate our growth plans,” Muilenburg said.

Furthermore it is expected that Boeing would takeover Embraer commercial plane production, while the company would keep its military and potentially business jet development. However, in the statement announcing the collaboration on commercial plane, a second venture for defense programs was announced, mentioning Embraer’s transport plane currently under development, the KC-390.

KC 390 in flight - Travel Radar - Aviation News
KC-390 in flight.
Photography of Embraer.

Boeing had previously offered a complete takeover of Embraer, the third biggest airplane manufacturer in the world. But this proposition was dismissed by the Brazilian government because of the strategic value represented by Embraer defense department. The strategic partnership will bring together more than 150 years of combined in the aerospace industry and leverage the two companies’ highly complementary commercial product lines. The partnership is an evolution of a long-standing history of collaboration between Boeing and Embraer over more than 20 years.

Although the deal will have mixed reviews and criticism the outcome will be a bright and positive future for both Boeing & Embraer.

Media Courtesy of Embraer.

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