Sao Paulo, Apr 25 (efe-epa).- Brazil’s Embraer went on the attack after Boeing announced Saturday that it was scrapping the planned $4.2 billion tie-up between two of the world’s three largest aircraft manufacturers.
“Embraer will pursue all remedies against Boeing for the damages incurred by Embraer as a result of Boeing’s wrongful termination and violation of the MTA (Master Transaction Agreement),” the Brazilian company said in a statement.
Signed in 2018, the MTA envisioned Boeing’s taking an 80 percent stake in Embraer’s commercial aviation division for $4.2 billion as well as the creation of a second joint venture to cultivate new markets for the Brazilian company’s C-390 Millennium military transport plane.
Embraer’s strength is in the category of regional jets, planes with 90-120 seats, a category currently dominated by Boeing’s archrival, Airbus.
Chicago-based Boeing said it was walking away from the arrangement because Embraer failed to live up to some of the conditions of the MTA.
“Boeing has worked diligently over more than two years to finalize its transaction with Embraer. Over the past several months, we had productive but ultimately unsuccessful negotiations about unsatisfied MTA conditions,” Marc Allen, head of Embraer Partnership & Group Operations for the US aerospace giant, said in a statement “We all aimed to resolve those by the initial termination date, but it didn’t happen. It is deeply disappointing. But we have reached a point where continued negotiation within the framework of the MTA is not going to resolve the outstanding issues,” he said.
The initial termination date was Friday.
After April 24 came and went without a resolution of the remaining issues, “Boeing exercised its rights to terminate after Embraer did not satisfy the necessary conditions,” the US company said.
The prospective deal had already received approval from all relevant regulatory authorities except the European Commission, which was still evaluating the implications of a tie-up between Boeing, the world’s largest maker of commercial planes, and Embraer, the third-biggest.
“Embraer believes strongly that Boeing has wrongfully terminated the MTA, that it has manufactured false claims as a pretext to seek to avoid its commitments to close the transaction and pay Embraer the US$4.2 billion purchase price,” the Brazilian firm said.
“We believe Boeing has engaged in a systematic pattern of delay and repeated violations of the MTA, because of its unwillingness to complete the transaction in light of its own financial condition and 737 MAX and other business and reputational problems, the Embraer statement continued.
Boeing finds itself in a much worse position now than in 2018. Already reeling from having to take its 737 MAX jetliner out of service after a pair of deadly crashes, the firm must now cope with a near-shutdown of commercial aviation thanks to the Covid-19 pandemic.
“Embraer believes it is in full compliance with its obligations under the MTA and that it has satisfied all conditions required to be accomplished by April 24, 2020,” Brazil’s flagship manufacturing company said. EFE as-nqs/dr