An Embraer 190-100IGW of Aerolineas Argentinas on a regular flight from Buenos Aires to the Argentine city of Bahia Blanca, passes in front of the “Supermoon” as seen Buenos Aires on February 19, 2019. (Alejandro PAGNI)

Sao Paulo (AFP) – Shareholders at Brazil’s Embraer approved Tuesday a deal to sell 80 percent of the airplane manufacturer’s commercial division to Boeing.

The deal between two of the world’s three biggest airlines will see Boeing take over Embraer’s core business of supplying passenger jets to airlines, leaving the Brazilian company with 20 percent.

The US giant will pay Embraer $4.2 billion for the stake.

Shareholders meeting at the company’s Sao Paulo headquarters also approved the creation of a joint-venture to develop and promote the KC-390 military cargo plane. 

Boeing will have 49 percent ownership of that company, with Embraer retaining 51 percent.

Embraer shares rose more than 4 percent on the Sao Paulo stock exchange before settling to 2.6 percent by noon.

“This groundbreaking partnership will position both companies to deliver a stronger value proposition for our customers and other stakeholders and create more opportunities for our employees,” said Paulo Cesar de Souza e Silva, President and CEO of Embraer. 

“Our agreement will create mutual benefits and boost the competitiveness of both Embraer and Boeing,” he said in a statement.

Embraer’s military plane and executive jet businesses were not part of the deal.

The deal will now be examined by antitrust authorities in Brazil and the US, as well as the European Union and China, where both companies have markets. 

Boeing and Embraer said in a joint statement they hope to have approval by the end of 2019.

Shortly after his inauguration in January, President Jair Bolsonaro gave his approval for the deal, saying he was satisfied that Brazil’s “sovereignty and national interests” had been preserved.

Embraer was founded as a state group in 1969 before being privatized in 1994, although the Brazilian government retained a “golden share” giving it the right to veto strategic decisions for the company.

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