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Brazilian court suspends Embraer-Boeing merger

Source: Xinhua| 2018-12-21 15:22:32|Editor: xuxin
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RIO DE JANEIRO, Dec. 20 (Xinhua) -- A Brazilian court on Thursday suspended the agreement between Brazilian aircraft manufacturer Embraer and U.S. plane maker Boeing for a joint venture company.

The temporary injunction issued Wednesday by Judge Victorio Giuzio Neto represents an answer to a petition filed by the Sao Jose dos Campos Metallurgy Workers' Trade Union, along with other unions in the areas where Brazilian manufacturer Embraer has plants.

The agreement foresees the creation of a joint venture of which Boeing would own 80 percent of stakes and Embraer the remaining 20 percent. The joint venture would deal only with Embraer's commercial airplanes sector (the company also produces military aircraft and executive jets).

The trade unions complained that the deal leaves all power in Boeing's hands and that, under the current conditions, the U.S. company could move production out of Brazil at any time, leading to a loss of jobs and technology.

Even before the injunction, the agreement still needed to be approved by the Brazilian government, which owns a golden share of Embraer and has veto power over such deals.

However, the new government which will take office in January has indicated that it is in favor of the agreement. Earlier this week, Vice President-elect Hamilton Mourao said that the deal is "essential" to Embraer to properly face competition.

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