EU Regulators To Probe Deal For Embraer Unit -- WSJ
September 27 2019 - 3:02AM
Dow Jones News
By Doug Cameron
This article is being republished as part of our daily
reproduction of WSJ.com articles that also appeared in the U.S.
print edition of The Wall Street Journal (September 27, 2019).
European competition regulators are expected to open an in-depth
probe into plans by Boeing Co. to take control of the
commercial-jetliner arm of Brazil's Embraer SA in a move that could
upset plans to close that deal by the end of the year.
Embraer said in a regulatory filing that the companies had been
told of the planned action by the European Commission, which is due
to reveal its initial findings on Oct. 4.
The potential investigation puzzled some antitrust lawyers as
the Commission approved the purchase by Airbus SE of the CSeries
jetliner business of Bombardier Inc, giving the European plane
maker the same foothold in the market for smaller jetliners as
Boeing hopes to gain via Embraer.
Boeing and Embraer declined to comment on a potential delay to
the closing of Boeing's planned $4.2 billion purchase of an 80%
stake in Embraer's jetliner business and a 49% stake in a unit
producing a new military cargo jet.
However, legal experts said the Commission probe would likely
take four to five months, soaking up more resources just as Boeing
is dealing with multiple investigations into its 737 MAX following
two fatal crashes.
"They're going to ask for much more information," said Jeff
Bialos, a mergers and acquisitions attorney at Eversheds Sutherland
LLC.
Boeing has already raised funding for the proposed deal through
a bond offering, while Embraer shareholders and Brazilian antitrust
officials have also given approval. Boeing would owe a $100 million
break fee if the transaction is felled by regulators. U.S.
antitrust officials raised no objections to the deal.
Embraer, which suffered a one-day strike among manufacturing
staff this week, is best known for making regional jets in the 70-
to 100-seat range, used heavily on routes that don't warrant larger
Boeing or Airbus planes. The new Bombardier CSeries, renamed the
A220, expands the Airbus product line with a jet seating up to 140
passengers.
Embraer last week delivered the largest offering from its new E2
jetliner range, which seats 146 passengers.
Write to Doug Cameron at doug.cameron@wsj.com
(END) Dow Jones Newswires
September 27, 2019 02:47 ET (06:47 GMT)
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