Brazilian airplane manufacturer Embraer on Saturday accused US giant Boeing of “wrongfully” terminating a $4.2 billion acquisition deal and making “false claims” to get out of the agreement.
Boeing had been due to buy an 80% stake in the Brazilian company’s commercial plane division but earlier on Saturday said it was exercising its right to pull out, claiming “Embraer did not satisfy the necessary conditions.”
“We believe Boeing has engaged in a systematic pattern of delay and repeated violations of the (deal), because of its unwillingness to complete the transaction in light of its own financial condition and 737 MAX and other business and reputational problems,” said Embraer in a statement.
The buy-out was already controversial since they are two of the three largest airline manufacturers in the world, after Airbus.
The merger was widely seen as a counterweight to Airbus’ takeover of Canadian Bombardier’s commercial aviation business.
The deal had been due to be finalized no later than Friday.
“Boeing has worked diligently over more than two years to finalize its transaction with Embraer,” said Marc Allen, the Boeing executive who led the joint venture plan.
He said that over the past several months the companies held extensive talks on what he terms unsatisfied conditions in the initial accord.
“We all aimed to resolve those by the initial termination date, but it didn’t happen,” Allen said, without explaining what the unresolved issues were.
The companies could have kept talking but decided not to.
Boeing is going through exceptionally hard times, between the grounding of its 737 MAX planes for more than a year after two crashes left 346 people dead and the coronavirus pandemic that has severely reduced air travel around the world.
The deal would have let Boeing compete with Airbus in the market for medium-haul planes and allow Embraer to benefit from Boeing’s powerful presence in the marketplace.
The deal had cleared all regulatory hurdles but was awaiting the green light from the European Commission.
The two companies will continue to work together on a program for a military transport plane called the C-390, Boeing said.