Boeing calls off the takeover of its Brazilian competitor Embraer. According to Boeing, Embraer has failed to meet contractual terms. From the Brazilian point of view, the accusation is unfounded. Boeing is looking for an excuse not to meet the obligation to pay the purchase price.
"We believe Boeing has systematically delayed and repeatedly violated the contract because it does not want to implement the transaction given its own financial situation, 737 Max and other business and reputation issues," Embraer responded on Saturday. Even all requirements were met on time, which is why Boeing now has to pay damages.
Takeover agreements generally provide for contractual penalties in the event that a contractual partner withdraws from the contract before the transaction is carried out. However, if the other partner does not meet his obligations, the contractual penalties will not apply. Exactly what conditions should have violated Embraer Boeing's message not out.
Boeing crisis over 737 Max, exacerbated by Corona
The American company is in a serious crisis. The young 737 Max 8 and 9 series turned out to be defective in several ways. After two crashes with around 350 fatalities, all 737 Max 8 and 9 are banned from flying worldwide. Several airlines have canceled orders for Boeing 737 Max and / or are demanding compensation for late delivery.
After building hundreds of new 737 Max aircraft that it cannot deliver, Boeing had to stop manufacturing the 737 Max aircraft. Boeing also had to take out a billion dollar loan, but still needs more money. In the meantime, the corona virus pandemic has reduced the demand for both new aircraft and spare parts.
Boeing 80, Embraer 20
In June 2018, Embraer and Boeing had agreed to found a new company. Embraer should bring in its scheduled aircraft division and receive 20 percent of the shares. Boeing should take over 80 percent and pay $ 4.2 billion for it. With the exception of the EU Commission, all relevant competition authorities have now approved the deal.
The previous year, Boeing rival Airbus had concluded a similar deal with the Canadian group Bombardier: Airbus took over just over half of the Bombardier department for the new Cseries jet aircraft. Airbus now owns three quarters and has renamed the Cseries "Airbus A220". The rest of the quarter is owned by the Canadian province of Québec.
Only six months ago, Boeing and Embraer had agreed on a second joint venture. This involves marketing the Embraer C-390 Millennium, a military transport jet, with Embraer holding 51 percent of the shares. Boeing would like to continue this project.
. (tagsToTranslate) Airbus (t) Boeing (t) Bombardier (t) Brazil (t) Coronavirus (t) Embraer (t) Canada (t) Aviation (t) USA (t) Competition (t) Economy