Boeing - Embraer Deal Faces In-depth European Commission Probe

(RTTNews) - Embraer (ERJ) disclosed in a regulatory filing that the European Commission plans to open an in-depth investigation into Boeing's (BA) bid for a controlling stake in Embraer's commercial aircraft business.

The preliminary review of the deal by the European Commission will end on October 4.

If a phase 2 investigation is confirmed, Embraer will evaluate the potential impact on the estimated timeline for the closing of the transaction which was originally tentatively estimated to occur by the end of 2019, the Brazilian planemaker said.

In July 2018, Boeing and Embraer announced a Memorandum of Understanding to establish a strategic partnership, and which proposed the formation of a joint venture comprising the commercial aircraft and services business of Embraer that would strategically align with Boeing's commercial development, production, marketing and lifecycle services operations.

Boeing will hold an 80 percent ownership stake in the joint venture and Embraer will own the remaining 20 percent stake. The transaction valued 100 percent of Embraer's commercial aircraft operations at $4.75 billion, and contemplates a value of $3.8 billion for Boeing's 80 percent ownership stake in the joint venture.