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Brazil court suspends Boeing-Embraer tie-up

AFP  |  Sao Paulo 

A Brazilian federal court has suspended a proposed USD 4.75 billion tie-up between US giant and the civilian business of Brazilian plane-maker pending the government of president-elect taking office.

The Thursday said it was taking action to avoid "possible concrete acts" that would be irreversible being taken on the aviation deal before the new administration comes in under Bolsonaro, who takes over on January 1.

and announced the deal in July. Under its terms, was to hold an 80 per cent stake in the Brazilian company's commercial business, thus allowing Boeing to offer planes with capacity of up to 150 seats -- a market it currently does not operate in.

Embraer's military aircraft business was excluded to overcome opposition to giving up a national champion to a foreign entity.

The agreement was seen as a response to a similar strategic partnership announced in October 2017 between Boeing's European arch-rival and Canada's

Embraer, the third largest in the world, was founded as a group in 1969 before being privatised in 1994, although the retains the right to make strategic decisions for the company.

The deal, which had said it expected to be finalised by the end of 2019, was struck under Brazil's outgoing

Thursday's ruling effectively prevents from seeing through the Boeing-Embraer deal in its final days before Bolsonaro's team takes over.

Bolsonaro, a far-right politician, had a long record as a nationalist and protectionist when it came to Brazil's economy.

But he changed tack to win over voters and investors in the run-up to his November election by advocating privatisations.

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Fri, December 07 2018. 03:15 IST