Boeing and Embraer confirmed on Thursday they are “engaged in discussions regarding a potential combination, the basis of which remains under discussion.” The brief statement was released after the Wall Street Journal reported that Boeing was in takeover talks with the Brazilian company. A merger would expand Boeing’s presence in the regional jet market and help it compete with a recent effort by Airbus to take over Bombardier, according to the Journal. The companies’ statement added: “There is no guarantee a transaction will result from these discussions. Boeing and Embraer do not intend to make any additional comments regarding these discussions. Any transaction would be subject to the approval of the Brazilian government and regulators, the two companies’ boards and Embraer’s shareholders.”
The Brazilian government has veto power over any such deal, and their approval is “far from guaranteed,” according to the Journal. Airbus and Bombardier partnered on the C Series program in October, and Airbus agreed to acquire a 50.01 percent stake in Bombardier’s new C Series single-aisle jet. Under the agreement, Airbus provides procurement, sales and marketing, and customer support expertise to Bombardier. Embraershares rose more than 28 percent during trading on Thursday, after word got out about the talks.
