Boeing sought to calm the concern Brazil had about a possible merger with Embraer SA after the Brazilian President Michel Temer along with other officials warned they would veto a bid for a full takeover for the jet maker.
Temer did say he would welcome the injection of capital that was foreign into the jet maker. His warning is the most recent reminder the company, which makes some military aircraft and was at one time more of the most successful products of the industrial policy of Brazil, remains the focus of great national pride.
Boeing announced that talks between it and Embraer on what has been called by the two companies a possible combination were continuing and insisted it completely respected the need to safeguard the defense of the company and other links to the state.
A spokesperson for Boeing said that the discussions continued, but the company has had and continues to have a great deal of respect for the role of Brazil’s government, as well as their concerns over security and defense.
Early Friday, Temer spoke at a news conference saying he would study the decision the two companies take on any alliance, and emphasized that his government would use the golden share it has in the business to block foreign control of the company, that at one time was fully state-run, but became fully privatized 11 years ago.
Temer added that when a decision comes, he would examine it and added that the purpose of its golden share was for the government to have the ability to take a decision such as this.
Brazil’s Minister of Defense Raul Jungmann said that the government welcomed a possible commercial alliance between Embraer and Boeing. He added that the government favors this type of alliance and other partnerships.
However, he also indicated that foreign control of Embraer was impossible; citing the central role the company has in the defense industry of Brazil.
Jungmann added that the moment control of Embraer is passed to a company based in another country, it would control strategic decisions for our country. No country, he stressed gives up its control of that.
Last year, Boeing signed a deal with Embraer under which Boeing will help to market the new cargo jet of the military, but also give maintenance services once the planes are sold.
The opposition of the government to a complete sale will not prevent a targeted deal said a source close to the negotiations.