Brazil Court Suspends Boeing-Embraer Tie-up

Sao Paulo, Dec 7 (AFP) A Brazilian federal court has suspended a proposed USD 4.75 billion tie-up between US aerospace giant Boeing and the civilian business of Brazilian plane-maker Embraer pending the government of president-elect Jair Bolsonaro taking office.

The Sao Paulo court Thursday said it was taking action to avoid "possible concrete acts" that would be irreversible being taken on the aviation deal before the new administration comes in under Bolsonaro, who takes over on January 1.

Boeing and Embraer announced the deal in July. Under its terms, Boeing was to hold an 80 per cent stake in the Brazilian company's commercial business, thus allowing Boeing to offer planes with capacity of up to 150 seats -- a market it currently does not operate in.

Embraer's military aircraft business was excluded to overcome Brazilian government opposition to giving up a national champion to a foreign entity.

The agreement was seen as a response to a similar strategic partnership announced in October 2017 between Boeing's European arch-rival Airbus and Canada's Bombardier.

Embraer, the third largest aircraft manufacturer in the world, was founded as a state group in 1969 before being privatised in 1994, although the Brazilian government retains the right to make strategic decisions for the company.

The deal, which Embraer had said it expected to be finalised by the end of 2019, was struck under Brazil's outgoing President Michel Temer.

Thursday's ruling effectively prevents Temer's government from seeing through the Boeing-Embraer deal in its final days before Bolsonaro's team takes over.

Bolsonaro, a far-right politician, had a long record as a nationalist and protectionist when it came to Brazil's economy.

But he changed tack to win over voters and investors in the run-up to his November election by advocating privatisations. ( AFP) IJT

(The above story is verified and authored by Press Trust of India (PTI) staff. PTI, India’s premier news agency, employs more than 400 journalists and 500 stringers to cover almost every district and small town in India.. The views appearing in the above post do not reflect the opinions of LatestLY)