Embraer Executive Jets Bullish for Future
Embraer's Executive Jets division, along with its defense and security businesses, will continue developing new products.
Though not directly a part of the Boeing JV, Embraer Executive Jets should benefit by the tie-in. (Photo: David McIntosh)

Following the announcement that Boeing plans to buy an 80 percent stake in Embraer’s commercial aviation business and form a joint venture with Embraer, the Embraer Executive Jets division will continue developing new products and supporting existing products as a standalone entity that includes Embraer’s defense and security businesses.


The announcement was in the form of a memorandum of understanding that proposed the formation of a joint venture meant to “strategically align” the companies’ commercial development, production, marketing, and lifecycle services operations.


The transaction values Embraer’s commercial aircraft operations at $4.75 billion and contemplates a value of $3.8 billion for Boeing’s 80 percent ownership stake in the joint venture.


The companies expect completion of the financial and operational details of the partnership and negotiation of transaction agreements to continue “in the coming months.” The transaction would then remain subject to shareholder and regulatory approvals, including approval from the government of Brazil. Assuming the approvals come in what the joint statement characterized as a timely manner, the companies expect the transaction to close by the end of 2019, or 12 to 18 months after execution of the definitive agreements.


“Business jets continue to be important,” said Embraer CEO Paulo Cesar de Souza e Silva on the opening day of LABACE 2018 in SĂŁo Paulo, Brazil. “We plan to continue developing our business jet unit. We are planning upgrades and investments in new products…to continue to advance our products. We are also making a big investment in customer support.”


Silva sees no impact on the Embraer Executive Jets engineering team once the transaction is completed. “We will have full engineering capability in the remaining Embraer [entity],” he said, “so we will be able to develop new products and sustain what’s already in service. The idea is to have two very strong companies [the Boeing-Embraer commercial aircraft operation and the Embraer Executive Jets, security, and defense company].”