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