Boeing scraps $4.2b Embraer deal as market shrinks

Boeing is walking away from its proposed $4.2b combination with Embraer’s commercial-aircraft business, ending years of talks, as the planemakers brace for a far smaller jetliner market after the coronavirus pandemic. The deal’s collapse turns two long-time business partners into competitors and strengthens Airbus’s long-term advantage in the lucrative market for single-aisle planes. The partnership with Brazil’s Embraer would have armed the US aerospace giant with smaller jets to compete against a new offering from Airbus. Boeing is abandoning the proposed tie-up weeks after CEO Dave Calhoun warned employees that the company would need to adjust to a “new reality” as travel demand vanishes because of the virus and airlines prepare for a slow recovery. Embraer’s market value has tumbled to less than $1.1b, about a quarter of what Boeing had been poised to pay for the Brazilian company’s commercial plane operations alone. Continued negotiation “is not going to resolve the outstanding issues,” Marc Allen, Boeing’s president of Embraer Partnership & Group Operations, said in a statement Saturday. “It is deeply disappointing.” Embraer responded that Boeing “wrongfully terminated” the agreement and that it plans to seek all remedies against Boeing for damages.<br/>