FARNBOROUGH, England (Reuters) - Top Boeing Co (BA.N) and Embraer SA (EMBR3.SA) executives on Monday defended their planned commercial aircraft partnership, saying they were confident it would win regulatory and shareholder approvals while launching Embraer into new markets.
“I can’t anticipate that anyone will be against this project given the benefits that this will bring to Brazil,” Embraer’s Paulo Cesar de Souza e Silva told a news briefing at Farnborough Airshow. “Who can be against more jobs, more exports, more technology, more access to capital?”
The two aircraft manufacturers announced last month a $4.75 billion joint venture giving Boeing a controlling stake in Embraer’s commercial aircraft arm.
The Boeing-Embraer alliance, following on the heels of the Airbus-Bombardier tie-up announced last year, represents the biggest realignment in the global aerospace market in decades, strengthening established Western planemakers against newcomers from China, Russia and Japan, analysts say.
The new company thrusts Boeing into the lower end of the market, giving stiffer competition to the CSeries jets - now rebranded as the A220 - designed by Canada’s Bombardier Inc (BBDb.TO) which are backed by European rival Airbus SE (AIR.PA).
The deal must still clear political and regulatory barriers before closing as proposed at the end of next year.
The partnership, which adds a 70- to 130-seat family to Boeing’s lineup, is expected to boost the U.S. firm’s earnings per share from 2020, generating annual pre-tax cost savings of about $150 million by the third year, the companies said.
Boeing CEO Dennis Muilenburg said on Monday the partnership would mark one of the defining moments in Boeing’s long history in aerospace.
In addition to the passenger jet deal, Boeing and Embraer will deepen a sales and services partnership on the new KC-390 military cargo jet through a separate defense venture that is likely to eventually receive a joint investment.
The companies told reporters they would collaborate on next-generations or modifications to the KC-390 platform as well as mutual agreements for managing the supply chain on the military and commercial side, while giving Embraer access to more markets.
The deal will allow the companies to go to customers with combinations of fleet services between the single-aisle 737 MAX airplane and Embraer’s E2 family, the companies said.
“Our teams work together seamlessly,” Muilenburg said.
Reporting by Eric M. Johnson; Editing by Jason Neely and Mark Potter