After the Brazilian government used its “golden share” to block two proposals from Boeing, which initially wanted to buy all of Embraer, negotiations now focus on a joint venture with Boeing having 80 percent to 90 percent of the capital and total control, according to business newspaper Valor Econômico. Embraer's executive and commercial jet divisions would be included in the new venture, with a “shrunken” Embraer retaining defense.

The paper predicted complex negotiations on such subjects as where engineers would be assigned, and whether Boeing would handle sales and marketing of Embraer's defense line. Agreements on parts supply, technology, and training still have to be hammered out. The proposal will be returned to the Brazilian government following the Carnival week, which ends February 14.

Embraer issued two denials of market rumors last Friday, while admitting that a joint subsidiary is under consideration, though Valor is the first to address business aviation's destiny under any deal.

Embraer's most recent results show that through the third quarter, commercial and business aviation were responsible respectively for 62.6 percent and 20.3 percent of the $4.1 billion in net revenue, while defense accounted for 16.6 percent and “other” for 0.5 percent.

Previous speculation about the Boeing-Embraer deal in the Brazilian press has focused on guarantees of what production would remain in Brazil, but Valor concentrated on the money. According to the business newspaper, the new firm would be independently valued, paid for in cash that would be distributed as a dividend to shareholders, and would report directly to Boeing in Chicago, with Embraer retaining the rights inherent to any minority shareholder.