Boeing Terminates $4.2 Bln Deal With Embraer

(RTTNews) - Boeing Co. (BA) has terminated a $4.2 billion deal to acquire the commercial plane division of Brazilian aircraft manufacturer Embraer.

The companies had planned to form a joint venture in which Boeing would have take an 80 percent stake in that division.

The deal was supposed to be finalized by last Friday, but Embraer did not satisfy conditions under the agreement, Boeing said.

The planned partnership had received approval from all necessary regulatory authorities, except the European Commission.

However, Boeing said that it will maintain its existing Master Teaming Agreement with Embraer that was originally signed in 2012 and expanded in 2016 to jointly market and support the C-390 Millennium military aircraft.

Meanwhile, Embraer said that Boeing wrongfully terminated the agreement, and it will seek all remedies against Boeing for the damage incurred.

The Brazilian company alleged that Boeing engaged in a systematic pattern of delay and repeated violations of the agreement, because of its unwillingness to complete the transaction in light of its own financial condition as well as 737 MAX and other business and reputational problems.

Embraer believed it was in full compliance with its obligations under the agreement and that it satisfied all conditions required to be accomplished by April 24, 2020.