US plane maker Boeing has announced it will take control of the commercial business unit of Brazil's Embraer. This will put the American aerospace giant in a position to compete in the market for smaller jets.
The announcement Thursday followed months of talks to allay concerns of the Brazilian government, which had veto power over the transaction and initially resisted ceding control to the US company.
Under the terms of the deal, Boeing will hold an 80-percent stake in the commercial part of Embraer, with the transaction valued at $4.75 billion (€4 billion).
The deal will allow Boeing to offer planes with a capacity of up to 150 seats, a market it does not currently compete in.
Late to the game?
"By forging this partnership, we will be ideally positioned to generate significant value for both companies' customers, employees and shareholders," Boeing CEO Dennis Muilenberg said in a statement.
The two companies are creating another joint venture to promote their defense products and services, especially Embraer's KC 390, a military transport aircraft.
News of the initial talks on the transaction was first reported in December. Since then, shares of Embraer have risen more than 60 percent, although the price dropped after the partnership was announced Thursday, with many investors cashing in on the previous jump.
hg/jd (AFP, Reuters)