Embraer received shareholder approval to proceed with its proposed strategic partnership with Boeing during a Tuesday morning general shareholders' meeting held at the Brazilian company’s headquarters in São Jose dos Campos. The proposal passed with 96.8 percent votes cast in favor of the transaction, while participation in the vote equated to 67 percent of all outstanding shares. The transaction values Embraer’s commercial aircraft operations at $5.26 billion and Boeing’s 80 percent share at $4.2 billion. A joint statement announcing the deal indicated that Boeing would take full operational and management control of the new company, but that a Brazil-based management team, including a president and CEO, will lead the joint venture and report to Boeing CEO Dennis Muilenburg.
Embraer shareholders also agreed to a joint venture to promote and develop new markets for the multi-mission medium KC-390 airlifter. Under the terms of that proposed partnership, Embraer will own a 51 percent stake in the joint venture and Boeing the balance. Embraer’s defense and executive jet business and services operations associated with those products would remain a standalone, publicly traded company.
Boeing and Embraer announced in December 2018 that they had approved the terms of the joint ventures and the Brazilian government issued its approval last month. Shortly thereafter, Embraer's board of directors ratified its support for the deal and signed definitive transaction documents. The timing of transaction now stands subject to regulatory approvals and agreement of certain “customary” closing conditions, all of which the companies said they hope to meet by the end of the year.
The final approval of the deal has survived several legal challenges initiated by employee unions, the most recent of which resulted in a judge issuing an injunction on Friday that, if not overturned, would have at least temporarily blocked the vote. As in previous attempts to block the deal, Embraer's appeal succeeded, thereby allowing the vote to take place.