Summary Boeing will pay Embraer $150 million due to abandoned merger that was due to take place in 2020. Initially planning to buy 80% of Embraer's commercial aircraft segment, Boeing aimed to compete with Airbus' narrowbody regional aircraft. Despite the compensation, Embraer's share price fell 4.
5% following the announcement. Following a lengthy arbitration process, Boeing has agreed to pay Embraer $150 million in compensation for walking away from a proposed tie-up between the US and Brazilian manufacturers. As reported by Reuters , the partnership was first announced in July 2018, with Boeing planning to buy 80% of Embraer's commercial aircraft manufacturing operations for $4.
2 billion. In a bid to better compete with Airbus' A220 aircraft that the European manufacturer had recently acquired from Bombardier, Boeing wanted to offer a smaller passenger aircraft such as Embraer's E-Jet family. In return, the Embraer would have benefited from Boeing's global supply chain and weight in the aviation market, hoping to boost sales of its E-Jet E2 family of aircraft.
The two manufacturers also announced plans for a second joint venture that would market the C-390 Millennium defense aircraft. The Embraer C-390 Millennium is a medium-sized military transport aircraft designed and developed by the Brazilian manufacturer in the early 2010s. A deal gone wrong However, in 2020, as the pandemic devastated the aviation industry, and still plagued by troubles with its 737 MAX aircraft, Boe.