Embraer, the Brazilian aerospace company, has claimed that Boeing wrongfully terminated the Master Transaction Agreement between the two companies. The agreement, signed in 2018, was aimed at creating a joint venture for Embraer’s commercial aviation business and was worth $4.2 billion.
In their statement, Embraer says that Boeing’s decision to terminate the agreement was made after three years of negotiations and repeated delays. The company also alleges that Boeing breached the agreement and failed to comply with its obligations.
This move by Embraer comes in response to Boeing’s announcement last Saturday that it would no longer be moving forward with the joint venture. Boeing cited the impacts of the COVID-19 pandemic as being a factor in its decision, stating that the commercial aviation industry had changed significantly since the agreement was signed.
However, Embraer has suggested that Boeing’s decision was motivated by factors beyond the pandemic. The company suggested that Boeing was seeking to avoid paying Embraer the $100 million termination fee that was included in the agreement.
As the two companies continue to navigate this dispute, it is likely that the legal ramifications of this decision will be significant. Embraer is a major player in the aerospace industry, with a strong presence in both commercial and military aviation. The company is known for its regional jet products and is a major supplier to airlines around the world.
However, it remains to be seen what the outcome of this dispute will be. Both companies have significant resources at their disposal and will likely put up a strong fight to defend their positions. As the story develops, it will be interesting to see how it impacts the broader aerospace industry and what lessons can be learned from this experience.