Boeing to acquire 80% of Embraer's commercial aircraft division

Alaska Airlines Embraer jet
An Alaska Airlines Embraer 175 regional jet. Photo Credit: Heather Dunbar/Shutterstock

Boeing has agreed to purchase 80% of Embraer's commercial aircraft division.

The transaction, which values Boeing's share at $3.8 billion, would be undertaken through the formation of a joint venture. 

The move would give Boeing a leading position in the regional jet market of 70- to 90-seat aircraft, a segment in which it does not currently compete. It also would boost Boeing's position to compete in the small mainline jet market with the newly formed partnership between Airbus and Bombardier's C-Series of 100- to 150-seat aircraft. 

"Boeing and the joint venture would be positioned to offer a comprehensive, highly complementary commercial airplane portfolio that ranges from 70 seats to more than 450 seats and freighters, offering best-in-class products and services to better serve the global customer base," the companies said. 

Once final, the joint venture is to be based in Brazil, the home of Embraer. Boeing would have operational and management control of the entity and the management team would report directly to Boeing CEO Dennis Mullenberg. 

The acquisition is subject to approval of the Brazilian government. 

Thursday's announcement follows confirmation by Boeing and Embraer in December that they were engaged in discussions about a "potential combination."

Airbus formally took controlling interest of Bombardier's C-Series program on July 1, finalizing an agreement that shook up the aerospace industry when the companies unveiled it last October.

That partnership, coupled with the merger of Embraer's commercial aircraft division with Boeing, would effectively leave a duopoly in the commercial passenger jet marketplace.

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