Boeing takeover of Embraer jets business in jeopardy
US company considers walking away as two sides haggle over conditions with hours to deadline
Boeing’s plan to acquire the regional jet business of Brazil’s Embraer hung in the balance on Friday as the two sides haggled over conditions attached to the multibillion-dollar tie-up just hours ahead of a deadline giving each the right to walk away.
The US aircraft maker, which is haemorrhaging billions of dollars of cash as a result of the year-long grounding of the 737 Max and the global aviation crisis, is weighing whether to abandon the deal.
People close to the matter said no decision would be taken until the midnight deadline had passed, but an announcement could come as soon as this weekend.
The deadline was agreed in a contract signed in January, which set a timetable for both sides to meet certain conditions.
If Boeing decides to walk away rather than extend the agreement, it is expected to cite Embraer’s failure to meet certain terms as the reason for abandoning the deal, the people said. EU approval is also still outstanding.
Analysts said Boeing had a big incentive to walk away. “It’s a liquidity question,” said Bank of America Merrill Lynch analyst Ron Epstein. “Is Boeing in a position to spend $4.2bn on an acquisition given what’s going on in the broader commercial aviation market?”