Boeing-Embraer's Proposed Joint Venture Hits Legal Hurdle in Brazil -- Update
20 Dezembro 2018 - 10:01PM
Dow Jones News
By Maria Armental
A Brazilian federal judge again sought to block Boeing Co.'s
(BA) planned takeover of Embraer SA's (ERG, EMBR3.BR) commercial
jetliner, citing Brazil's national and military interests.
A similar challenge this month was reversed on appeal. Embraer
said in a statement it again plans to appeal the decision.
Under the terms of the agreement, 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 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 18:46 ET (23:46 GMT)
Copyright (c) 2018 Dow Jones & Company, Inc.
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