On Embraer’s earnings call earlier this week, a statement was made that the proposed transaction between Boeing-Embraer would now close by the end of 2019, rather than the end of 2018 as previously stated. This indicates that there may be several areas that still need to be ironed out, and invites the possibility that the transaction may be further delayed or perhaps never be realized.
We have always had a number of concerns about the transaction. First and foremost, would adequate resources remain to support the business jet and military business once the commercial side is moved from Embraer to the proposed joint venture? It was indicated on the conference call that a good portion of the transaction revenue would be passed along to shareholders. We had hoped it would have been re-invested in the business jet and defense sectors to further strengthen the company’s competitive position in these key markets.