Boeing, an American multinational corporation, has recently entered a $4.2 billion deal to acquire the commercial plane division of Embraer S.A., its Brazilian rival.
The two companies have recently planned to form a joint venture where Boeing would obtain a 80% stake in the commercial plane division. The stake acquisition deal was due to be closed latest by 1st May. However, Boeing has recently informed of its intention to pull out from an initial deal by exercising its rights, as Embraer did not satisfy the necessary conditions of the preliminary deal, which was formed in July 2018.
According to Marc Allen, the executive of Boeing who led the recent joint venture deal, the company has worked diligently over the past 2 years to close the transaction with Embraer. He added that the companies held extensive talks in the past months regarding the unsatisfied conditions of the deal in the initial record.
Boeing has not disclosed the exact unresolved issues and conditions of Embraer, which were expected to be resolved by the termination date. The shares of Boeing have recently recorded a hike of 1.88% in the pre-market trading, to indicate $131.40 opening bell price each.
People with knowledge of the matter have stated that the company is planning to cut the production of its 787 Dreamliner, while revealing its cost-cutting strategy through staff buyouts and layoffs. However, it has initiated the process of returning 27,000 employees to the main Washington-based assembly site to pursue mid-2020 return-to-service for its grounded 737 MAX jet.
According to David Calhoun, chief executive officer of Boeing, the industry has recently taken a step to recover from the ongoing coronavirus crisis. For instance, the United States government and ten airlines have agreed upon a $25 billion package to support the airlines until the companies recover from the COVID-19 crisis.