Boeing-Embraer Partnership Receives Shareholder Approval in Brazil

The proposed strategic partnership between Boeing and Embraer was approved by Embraer's shareholders during an Extraordinary General Shareholders' Meeting held on Tuesday at the company's headquarters in Brazil.

At the special meeting, 96.8% of all valid votes cast were in favor of the transaction, with participation of approximately 67% of all outstanding shares. Shareholders approved the proposal that will establish a joint venture made up of the commercial aircraft and services operations of Embraer. Boeing will hold an 80% ownership stake in the new company, and Embraer will hold the remaining 20%.

The transaction values 100% of Embraer's commercial aircraft operations at $5.26 billion, and contemplates a value of $4.2 billion for Boeing's 80% ownership stake in the joint venture.

Embraer shareholders also agreed to a joint venture to promote and develop new markets for the multi-mission medium airlift KC-390 (pictured). Under the terms of this proposed partnership, Embraer will own a 51% stake in the joint venture, with Boeing owning the remaining 49%.

"Approval by Embraer's shareholders is an important step forward as we make progress on bringing together our two great aerospace companies. This strategic global partnership will build on Boeing's and Embraer's long history of collaboration, benefit our customers and accelerate our future growth," said Dennis Muilenburg, Boeing chairman, president and chief executive officer.

Embraer's defense and executive jet business and services operations associated with those products will remain as a standalone publically-traded company.

"Our shareholders have recognized the benefits of partnering with Boeing in commercial aviation and the promotion of the multi-mission airlift KC-390, as well as understanding the opportunities that exist in the executive aviation and defense business," said Nelson Salgado, Embraer Executive Vice President of Finance and Investor Relations.

Boeing and Embraer announced in December 2018 that they had approved the terms for the joint ventures and the Brazilian government gave its approval in January 2019. Shortly thereafter, Embraer's board of directors ratified its support for the deal and definitive transaction documents were signed. The closing of the transaction is now subject to obtaining regulatory approvals and the satisfaction of other customary closing conditions, which Boeing and Embraer hope to achieve by the end of 2019.

Embraer will continue to operate the commercial aviation business and the KC-390 program independently until the closing of the transaction.

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