Brazilian Court Blocks Embraer-Boeing Aerospace Venture

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Embraer SA and Boeing have been trying to get a deal sealed but are blocked by Brazilian court so far.

Brazilian federal court grants injunction blocking tie between U.S. aerospace company Boeing Co (BA) and Embraer SA (ERJ).

The legal action was brought by four congressmen with Brazil’s left-wing Workers Party.

The companies announced in July that Embraer would sell 80 percent of its commercial aviation business to Boeing in a deal valuing that segment at $4.75 billion.

The deal has stalled partly because the Brazilian government, which has veto power at the planemaker, has been reluctant to give it a greenlight. Only then could the company call a shareholders meeting to approve it.

“The reason is very simple, Boeing is not giving up anything”

The decision says Embraer would give up its profitable commercial division.

The new company would threaten the rights of the Brazilian government because it would restrict its control over Embraer to the part of the company that will not be sold to Boeing.

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