On February 26, Embraer shareholders approved a $4.2 billion proposed strategic partnership with Boeing, in which the company will sell 80 percent its commercial jet division to Boeing through a joint venture. Approximately two-thirds of outstanding shares participated in the vote, with 96.8 percent in favor of the partnership. Boeing will have operational and management oversight of the new joint venture, although its management team will be based in Brazil. The deal is widely expected to allow Boeing to better compete with Airbus in the sub-150 seat jetliner market.

A second joint venture, also approved by Embraer shareholders today, will promote and develop new markets for the KC-390 multi-mission aircraft was also approved, with Embraer retaining a 51 percent stake. Embraer’s defense operations and its executive jet division are not included in the deal with Boeing.

First proposed in early 2018, the Embraer-Boeing deal moved steadily forward in recent months. After nearly a year of private negotiations, the two companies announced the final terms of the two joint ventures in December. In early January, newly inaugurated Brazilian President Jair Bolsonaro announced he would approve the proposal, ending speculation that the government might use its golden share in Embraer to scuttle the agreement. Although it was widely expected that Embraer shareholders would approve the deal, the company faced several last-minute injunctions and legal challenges from employee unions—common during the mergers and acquisitions process in Brazil.

The agreement will now face review by regulators in the countries where the two companies currently operate. Embraer and Boeing hope to secure regulatory approval by the end of 2019, and launch operations for the new joint venture in January 2020.

Image: "A aeronave Embraer 190 em São José dos Campos", by Antônio Milena/Agência Brasil