The current Brazilian government has confirmed that it will give the go-ahead to the Boeing – Embraer tie-up, but only after the forthcoming Presidential election in October, according to the country's Defense Minister Joaquim Silva. The reason for the delay is to avoid stirring up debate amongst the presidential candidates.
Former president Lula da Silva has been a strong protester against the deal, declaring that he would use the government's power of veto to block the deal. While it is unlikely he will be able to run as a candidate in the October election, there is a strong possibility that his running mate may be lifted into the second round of voting on October 28.
It was announced in July that Boeing was going to take an 80% stake in the commercial jets section of Embraer, investing US$3.8 billion in the US$4.75 billion joint venture. Embraer's defense and business jet operations are not being included in the deal.
The move by Boeing had been on the table for some time but was given greater priority after the Airbus – Bombardier deal over the then Bombardier CSeries of jets, putting that duopoly in the driving seat where the 70-130-seat segment of the market was concerned.
With the Boeing – Embraer tie up, analysts see these two mergers as the biggest realignment in the global aerospace industry for decades. With Boeing and Embraer may be on one side, Airbus and Bombardier on the other, these moves have strengthened Western plane manufacturers against new entrants to the market, such as China.
