Boeing-Embraer's Proposed Joint Venture Hits Legal Hurdle in Brazil -- 2nd Update
December 20 2018 - 7:47PM
Dow Jones News
By Maria Armental
A Brazilian federal judge again sought to block Boeing Co.'s
(BA) proposed takeover of Embraer SA's (ERG, EMBR3.BR) commercial
jetliner business, citing Brazil's national and military
interests.
A similar challenge this month was reversed on appeal. Embraer
said in a statement it also plans to appeal the latest
decision.
Under the terms of an agreement that was first announced in
July, Chicago-based Boeing would take an 80% stake in Embraer's
commercial airplane and services business, and control 51% of the
joint venture.
Embraer would have the right to force Boeing to buy the
remaining 20% stake over the next decade.
The deal requires approval from Brazil's government, which has a
so-called golden share in Embraer that gives it veto power over any
such transaction.
In a preliminary decision that was issued Wednesday, Brazilian
federal judge Victorio Giuzio Neto again questioned the proposed
deal and pointed to a similar move U.S. officials took in thwarting
Broadcom Ltd.'s hostile bid for Qualcomm Inc. over national
security concerns.
The judge called the Boeing-Embraer venture an uneven
relationship that couldn't be carried out without compromising
national interests.
Boeing declined to comment on the matter.
--Andrew Tangel contributed to this article.
Write to Maria Armental at maria.armental@wsj.com
(END) Dow Jones Newswires
December 20, 2018 20:32 ET (01:32 GMT)
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