The Brazilian government is not poised to interrupt plans for a tie-up between national planemaker Embraer and US giant Boeing, a senior official said Monday, days after President Jair Bolsonaro expressed wariness over the venture.
The government “is not thinking of interrupting this negotiation,” Augusto Heleno, secretary for institutional security, said after accompanying Bolsonaro to an event in Brasilia appointing the new heads of public banks, the O Globo news website reported.
Bolsonaro last week sent shares in Embraer diving after saying that, while he approved of the $5.2-billion tie-up, he wanted reassurance that Boeing would not simply gobble up the Brazilian company.
Under the planned joint venture, Boeing is to take 80 percent of Embraer’s commercial plane manufacturing business, giving it capacity to produce aircraft of up to 150 seats — a market in which it currently does not compete.
Embraer’s military division is excluded from the deal, which was announced mid-2018 and is meant to be finalized by the end of this year.
Embraer is the third-largest aircraft manufacturer in the world. It was privatized in 1994, but the Brazilian government retains a “golden share” with veto power over strategic decisions.
Heleno, a retired military officer, said “there is a concern” over Embraer’s technological assets “that we don’t intend to lose.” But he said that “can be perfectly set out” in the negotiations.
Embraer shares were trading slightly lower, down 0.5 percent, in Sao Paulo midway through Monday.