Embraer takes Boeing to arbitration over failed deal as shares plummet

Brazil's Embraer Monday said it had begun an arbitration process against Boeing, after the US planemaker abruptly canceled a US$4.2b deal over the weekend that was years in the making. Embraer shares fell as much as 16% in Sao Paulo to a more than 8-year low on news of the cancellation, suggesting investors had hoped until the last minute that the takeover agreement would not fall apart. The sudden collapse, triggered by a deadline that Boeing refused to extend, drew an irate response from Embraer on Saturday. But on Monday, when Embraer executives hosted a call with analysts, the angry rhetoric was largely absent. Embraer is in a delicate situation, having bet the future of the company on Boeing only to find itself now in isolation and without a Plan B, all while the coronavirus crisis ravages the travel industry. Still, Embraer tried to reassure investors that it remains a solid company, although its CEO Francisco Gomes Neto acknowledged that 2020 will be a "tough" year and that 2021 "will be worse than we had thought." He added that Embraer has been able to find US$1b in cash savings for 2020, and that it has not suffered any aircraft order cancellations due to the coronavirus crisis.<br/>