Boeing, Embraer are near deal on comm’l jet venture

Boeing Co. and Embraer SA are nearing an agreement to form a joint venture to market the Brazilian company’s commercial jets, people familiar with the talks said.

The two planemakers have made good progress on the framework for a deal, but hurdles remain and the final terms are still being hammered out, said one of the people, who asked not to be named because the negotiations are private. Boeing presented a formal proposal to Embraer on Thursday, said another person, a day after the US manufacturer’s boss publicly touted the potential tie-up.

It’s not clear whether the jointly operated company under discussion would encompass all or part of Embraer’s commercial-aircraft unit. Embraer’s military business would be excluded, potentially resolving the Brazilian government’s concerns over national interests.

A Boeing-Embraer combination would extend a shift of the commercialplane industry that began in October when Airbus SE agreed to take control of Bombardier, Inc.’s C Series jet. Boeing lost a bid last week to block the C Series from the US market, when the US International Trade Commission ruled against the Chicago-based planemaker.

Boeing and Embraer have “highly complementary product lines,’’ Dennis Muilenburg, the US company’s chief executive officer, said on an earnings call Jan. 31. He said Boeing was trying to find the right deal structure for a tieup with the Brazilian company.

Embraer rose 4.9 percent to 21.40 reais in Sao Paulo after climbing as much as 9.3 percent for the biggest intraday gain in six weeks. Boeing fell 1.2 percent to $352.77.

O Globo reported earlier on the potential commercial-jet venture. Embraer and Boeing declined to comment. Brazil’s Defense Ministry didn’t immediately respond to a request for comment. (Bloomberg)