Embraer blasts Boeing for ‘wrongfully’ scrapping $4.2bn deal

Published: 28 April 2020 - 5 a.m.

Embraer has angrily hit out at Boeing accusing the US manufacturer of making up false claims to get out of a $4.2 billion acquisition which was scrapped over the weekend.

Boeing announced on Saturday that it was withdrawing from the deal, which would have seen it buy an 80% stake in Embraer’s commercial aircraft division and challenge Airbus’ dominance in the narrow-body market.

In a statement Boeing said that it had “exercised its rights to terminate after Embraer did not satisfy the necessary conditions”.

But Embraer said that Boeing “wrongfully terminated” the Master Transaction Agreement (MTA) and claimed the US company exited the deal because of internal issues around its business and finances.

A statement from Embraer 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.”

Brazil-based Embraer said it will pursue Boeing for damages resulting from the scrapped MTA.

According to media reports, Embraer, which makes planes of up to 150 seats, is now adjusting its production output and capex in an attempt to preserve liquidity.

The planned merger had received approval from every necessary regulator, except for the European Commission. Embraer is the third largest aircraft manufacturer in the world, behind the US’ Boeing and Europe’s Airbus.

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