Key vote on Boeing tie-up may proceed: Embraer

$4.2b Payment from Boeing to control Embraer’s division

sao paulo — Brazilian planemaker Embraer said on Tuesday a key shareholder meeting to vote on the sale of 80 per cent of its commercial aviation business to Boeing could proceed as scheduled on Tuesday.

A federal judge had suspended the meeting on Friday at the request of a union representing some Embraer workers which had lobbied against the deal, arguing in part that Boeing would slash jobs if the tie-up was approved.

Last-minute legal twists are common in Brazil and Embraer had already overturned several injunctions that temporarily blocked the deal.

Under the proposed terms, Boeing will pay $4.2 billion to control Embraer’s most profitable division, its commercial aviation business.

The deal will provide a cash influx that the Brazilian planemaker has defended as crucial to its survival as increased competition between Boeing and Airbus squeezes out smaller rivals.

“The potential operation with Boeing will save Embraer,” lawyers for the Brazilian planemaker said in July in a court filing as it battled an earlier challenge to the deal.

But critics say the arrangement will leave Embraer weaker and financially dependent on its two remaining divisions, executive jets and defense, both of which have posted losses in recent quarters.

Foreign shareholders, which own a tiny slice of the company, already overwhelmingly voted to approve the deal.