Boeing-Embraer merger falls through amid coronavirus crisis

Boeing scraps deal which would have posed serious competition to Airbus’ grip on the narrow-body market
Boeing embraer, Boeing embraer merger, Embraer

A planned merger of aircraft manufacturers Boeing and Embraer has collapsed.

Estimated to be worth $4.2 billion, the deal was originally designed to challenge Airbus’ dominance in the narrow-body market.

But with the ongoing coronavirus crisis likely to reshape the market and damage demand for air travel long after it subsides, Boeing has decided to walk away from the planned merger.

 “Over the past several months, we had productive but ultimately unsuccessful negotiations about unsatisfied MTA conditions. We all aimed to resolve those by the initial termination date, but it didn't happen," said Marc Allen, president of Embraer partnership and group operations.

"It is deeply disappointing. But we have reached a point where continued negotiation within the framework of the MTA is not going to resolve the outstanding issues."

The planned Master Transaction Agreement (MTA) raised concerns about competition in the market but after an investigation, Boeing and Embraer received approval from most regulatory authorities, except for the European Commission.    

Part of the venture included a plan to develop a C-390 Millennium military aircraft. The project, signed in 2012, will still go ahead.

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