Boeing to pay $150 million in arbitration to Embraer after failed merger
Embraer is to receive $150 million in arbitration settlement from Boeing, the Brazilian manufacturer has revealed in a regulatory filing.
“Pursuant to a collar agreement recently entered into between the parties, Boeing will pay the gross amount of USD $150 million to Embraer,” stated the filing, confirming that “the pending arbitration proceedings between [the two parties] have concluded”.
In April 2020, Boeing announced that it had terminated its Master Transaction Agreement (MTA) with Embraer, a deal that would have seen the former acquire an 80% ownership stake in Embraer’s commercial aircraft and service operations for a purchase price of $4.2 billion. The terms of the strategic partnership were first approved by both parties in late 2018, although in the middle of the pandemic, Boeing officially pulled out claiming “unsuccessful negotiations about unsatisfied MTA conditions”.
The planned partnership – which had received unconditional support from all necessary regulatory bodies (with the exception of the European Commission) – would also include a “second joint venture to develop new markets for the C-390 Millennium,” explained Boeing.
Leeham News and Analysis estimates that the $150 cash payment is “below the market expectations, which were around $300 million to cover the Embraer carve out and carve in cost”.
