European Commission antitrust officials have resumed their review of plans by Boeing to buy 80 percent of Embraer’s commercial airplane operation and set a new deadline for completion of their investigation of August 7. A filing that appeared in the commission’s competition authority database on Wednesday confirmed the new deadline. According to an EC spokesperson, authorities restarted their probe on April 8.
The latest phase of the extended probe comes after ten other jurisdictions, including most recently Brazil, approved the planned merger. The European Commission has repeatedly invoked a “stop the clock” mechanism meant to give the companies involved time to produce more information pertaining to the merger plan.
In late March Embraer said it expected a further delay in the review process until at least June 23. At the time Embraer CEO Francisco Gomes Neto insisted that the deal remains a top priority for the company despite a potential interruption due to the Covid-19 crisis. Embraer completed the so-called carve-out of its commercial business in January, it said.
The deal, approved by the Embraer shareholders last year, calls for Boeing to pay $4.2 billion in cash for the four-fifths' stake. However, as Embraer’s stock lost value due to the coronavirus crisis, some analysts suggested that the price could prove too high. Embraer has pledged to pay its shareholders a $1.6 billion special dividend from the proceeds of the sale.
Even before the World Health Organization declared the coronavirus crisis a global pandemic, potential Embraer E-Jet customers had shown some hesitancy to pursue deals while the European Commission repeatedly halted its probe to ask for more documentation from the two companies.
“Certain airlines want more visibility on the transaction before they're prepared to move forward with their fleet planning,” Embraer Commercial Aircraft CEO John Slattery told AIN in February. “We are hearing increasingly that airlines are getting a little frustrated. They want some surety around what the future is going to look like so they can plan accordingly. So we understand that frustration. We're doing everything we can to get our transaction closed so that we can get back to the day job, which is designing new aircraft, building fine aircraft, and servicing them in the marketplace.”