The outcome of the arbitration between Boeing and Embraer, revealed on Monday, brought frustration to the financial market, which was expecting greater compensation to the Brazilian manufacturer.
The gross value of the compensation was US$ 150 million, considered much lower than the expenses that Embraer had to separate its commercial aviation business (around US$ 240 million).
As a result, the company’s shares closed with a drop of more than 5%, but still extremely valued in the year.
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The “collar agreement” in a New York Court was concluded more than four years after the two companies broke off relations when Boeing gave up the joint venture, valued at US$ 4.2 billion.
Access to confidential information
The partnership, which has been in the works since late 2017, involved the creation of a new company, Boeing Brasil Commercial, which would be responsible for the production and marketing of the E1 and E2 regional jets and potential new aircraft.
For Boeing, Embraer was a natural partner after Airbus took over Bombardier’s C Series jet line and began to have aircraft with 100 or more seats in its portfolio, the A220.
With the Brazilian manufacturer, Boeing would fill a niche below the 737 that began with the successful 76-seat E175 regional jet.
In addition, the aerospace giant would have access to a young and creative workforce, capable of theoretically helping it get a new commercial aircraft off the ground to compete with the A320 family.
Access to confidential information about Embraer’s aircraft and other plans under study is said to have motivated the US$150 million compensation, Bloomberg revealed.
The amount, however, is slightly above the termination clause of the Mutual Transaction Agreement (MTA) signed by the two companies shortly after the announcement of the merger of their businesses.
