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Embraer: Boeing wrongfully broke the deal

Brazilian manufacturer Embraer reports that it will be filing a lawsuit against its erstwhile partner Boeing Co. On April 25, Embraer stated that it received Boeing’s notice of termination of the master transaction agreement (MTA) with Embraer.

Embraer reports it will sue Boeing Co. after Boeing terminated an agreement to buy 80 percent of Embraer's commercial aircraft business. Photo courtesy of Embraer.

The deal would have joined Embraer and Boeing in an agreement to buy 80 percent of Embraer’s commercial aircraft business for $4.2 billion. The agreement did not include Embraer’s executive jet division.

In a statement, Embraer said that it “… believes strongly that Boeing has wrongfully terminated the MTA, that it has manufactured false claims as a pretext to avoid its commitments to close the transaction and pay Embraer the US$4.2 billion purchase price. We believe Boeing has engaged in a systematic pattern of delay and repeated violations of the MTA, because of its unwillingness to complete the transaction in light of its own financial condition and 737 MAX and other business and reputational problems.

“Embraer believes it is in full compliance with its obligations under the MTA and that it has satisfied all conditions required to be accomplished by April 24, 2020.

“Embraer will pursue all remedies against Boeing for the damages incurred by Embraer as a result of Boeing’s wrongful termination and violation of the MTA.”

The deal originally surfaced in 2018, and was signed in February 2019. Since then, Boeing has suffered setbacks as the 737 Max fleet was grounded due to concerns over the airplane’s stall protection system, and the market for airliners shrank with the COVID-19 pandemic.

Thomas A. Horne

Thomas A. Horne

AOPA Pilot Editor at Large
AOPA Pilot Editor at Large Tom Horne has worked at AOPA since the early 1980s. He began flying in 1975 and has an airline transport pilot and flight instructor certificates. He’s flown everything from ultralights to Gulfstreams and ferried numerous piston airplanes across the Atlantic.
Topics: Financial

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