Embraer is getting compensation for an abandoned merger
Boeing $BA (BA) might be half of the global duopoly for commercial airliners, but there was a chance it could have been even bigger if a tie-up with Embraer (ERJ), a Brazilian commercial planemaker, had gone through. The incomplete deal has cost Boeing $150 million, Reuters reports.
Back in 2018, Boeing announced that it was going to acquire an 80% controlling stake in Embraer for $4.2 billion. But before the deal could be fully completed, the COVID-19 pandemic began. Boeing called off the deal, and Embraer sought damages. And now Boeing is paying up following years of arbitration.
Ironically, the merger at the time was meant to help firm up Boeing’s place in its competition with chief rival Airbus. Boeing was reeling not just from the pandemic, but also from the grounding of its 737 Max 8 planes following a pair of deadly plane crashes.
Now, Boeing is still trying to keep up with Airbus (AIR), which has surpassed its American counterpart to become the biggest planemaker in the world. Plus, thanks to another 737 Max mess, Embraer is reportedly plotting to take on both Boeing and Airbus in the commercial airliner market.
Join 500,000+ readers who start their day with Quartz.
By subscribing, you agree to our Terms of Service and Privacy Policy.
