Boeing, Embraer forge $4.75B jetliner venture

Boeing is forming a $4.75 billion venture with longtime industrial partner Embraer, a move that will expand the U.S. planemaker’s manufacturing base abroad while extending its reach into the market for small jetliners.

Under a preliminary deal, Boeing will own 80 percent of a partnership controlling Embraer’s commercial airplane and services business while the Brazilian manufacturer holds 20 percent, the companies said in a statement Thursday. The tie-up caps years of talks between the two, while extending the duopoly held by Boeing and Airbus SE as competitive threats emerge from rivals in Russia, Japan and China.

By adding Embraer’s E-Jet family to its portfolio, Boeing bolsters its arsenal in the newest battlefront with Airbus: the market for 100-seat planes. The European aerospace giant took control of Bombardier Inc.’s C Series jet on July 1, through a joint venture it forged with no out-of-pocket cost.

Boeing was left without a comparable offering, while Embraer, Bombardier’s main rival, faced a tough new competitor in Airbus’s global marketing organization.

Embraer, a jewel of Brazilian industry, will remain a separate company that makes military and private jets while reaping a revenue stream from the new partnership.

The structure, along with the company’s flagging sales and an increasingly challenging market, helped win the support of the Brazilian government.

Boeing was little changed at $333.18 Thursday in New York. Finalization of the deal is expected to continue in the coming months, the companies said. Assuming the pact wins regulatory approval, the transaction is expected to close by the end of next year. The partnership is expected to add to Boeing’s earnings begin-