Chinese company may buy Embraer: analysts

Chinese companies, such as the producer of a home-made narrow-body aircraft, could be potential buyers of Brazil’s Embraer, Chinese analysts said, because the global aviation and aircraft manufacturing recession has provided opportunities for Chinese aircraft makers.

Buying Embraer could help Chinese companies gain key technologies, such as engines, and allow a buyer to open up world markets for domestic products, as Embraer has a complete production capacity for regional airliners, an anonymous market watcher told the Global Times on Tuesday.

“These are the advantages of Embraer, as well as the current weaknesses for Chinese plane producers,” he said.

His comments came after the failed acquisition of Embraer by Boeing.

Embraer said on Monday it had begun an arbitration process against Boeing, after the US planemaker abruptly canceled a $4.2 billion deal over the weekend that was years in the making, according to a Reuters report.

But Brazil’s government, which used to own Embraer and is still the company’s largest military client, took a more upbeat tone.

It is looking at China as a potential new partner for the planemaker, even as several senior Brazilian government figures have attacked the Chinese government recently, the report said.

It is a good chance for Chinese plane producers to purchase the company amid the global aviation recession, and the deal would also be in line with the Chinese government’s “New Infrastructure” ambition, another veteran insider told the Global Times on Tuesday.

China is launching the campaign to offset the economic downdraft of the coronavirus pandemic, and those “New Infrastructure” projects are focused in areas including 5G networks, the industrial internet, intercity transportation and inner-city rail systems, data centers, artificial intelligence, ultra-high voltage, and newenergy vehicle charging stations.

But the insider warned that it would not be easy to reach the deal, as global purchasers could encounter barriers on the political side. “It is not a problem of money,” he said.

Earlier this year, the US government was weighing whether to deny GE’s latest license request to provide the CFM LEAP-1C engine for the narrow-body COMAC jet, although earlier this month the government finally granted a license to GE, according to Reuters.

Chinese producers such as the Commercial Aircraft Corp of China are catching up with the world market with their home-made planes such as the C919, in a bid to grab market share from the legacy producers.