Boeing to pay Embraer $150 million to settle dispute

The New York Arbitration Court has set the amount that Boeing will have to pay Embraer at US$150 million (around R$833 million) for having withdrawn from a merger with the Brazilian company.

Negotiations for the deal began in 2020, when Boeing backed out of buying Embraer’s main commercial jet division for $4.2 billion.

At the time it announced the withdrawal from the deal, Boeing said that Embraer did not meet the necessary conditions. Embraer said that Boeing was withdrawing from the contract because it was facing financial difficulties.

Two years earlier, in July 2018, the two companies announced the creation of a new company.

The deal provided that Boeing would take control of the company, with an 80% stake, and Embraer would have a 20% stake.

Prejudice

With Boeing’s withdrawal, Embraer began a negotiation process to recover part of the loss.

The Brazilian company recently reported to the market an estimated loss of R$980 million. As the agreement is confidential, it is not known whether Embraer requested a specific amount to close the deal.

The US$150 million agreement was confirmed by Embraer this Monday (16) through a statement addressed to shareholders and the market.

Boeing also released a statement about the case. The North American company said it was satisfied with the agreement.

“We are pleased to have concluded the arbitration process with Embraer. More broadly, we are proud of our more than 90 years of partnership with Brazil and look forward to continuing to contribute to the Brazilian aerospace industry,” Boeing said.

The two companies are still facing each other in another lawsuit

Despite the agreement, the two companies are still at odds in another lawsuit over Boeing’s acquisition of Brazilian engineers. The lawsuit is being filed by Brazilian defense industry associations.