Friday, 3 Jul 2020

Embraer says Boeing wrongfully terminated merger deal

CHICAGO (AP) — Boeing’s announcement that it is terminating
an agreement to join forces with Embraer has prompted an angry response from
the Brazilian jet maker, which is now threatening to seek damages.

The pair had planned to work together on Embraer’s
commercial aviation business and to develop new markets for its C-390
Millennium aircraft. They had been working toward an agreement for two years.

Boeing said it ended the agreement after Embraer did not
meet conditions laid out by the deal, in which Boeing would have held majority
ownership. Over the past few months, the companies had “productive but
ultimately unsuccessful negotiations” about the unsatisfied conditions, which
was “deeply disappointing,” said Marc Allen, Boeing’s president of Embraer
partnership and group operations.

Embraer issued a statement saying it “believes strongly that
Boeing has wrongfully terminated” the mutual transaction agreement and “that it
has manufactured false claims as a pretext to seek to avoid its commitments to
close the transaction and pay Embraer the US$4.2 billion purchase price.”

“We believe Boeing has engaged in a systematic pattern of
delay and repeated violations of the MTA (master transaction agreement),
because of its unwillingness to complete the transaction in light of its own
financial condition and 737 Max and other business and reputational problems,”
it added.

“Embraer will pursue all remedies against Boeing for the
damages incurred by Embraer as a result of Boeing’s wrongful termination and
violation of the MTA,” the company said.

The collapse marked the latest mishap for Boeing. The
company’s best-selling plane, the 737 Max, has been grounded for more than a
year after two deadly crashes that led to federal investigations. Those
problems, combined with deflated demand for flights due to the pandemic,
sharply reduced the company’s cash.

Source: Read Full Article