By Lise Alves, Senior Contributing Reporter
RIO DE JANEIRO, BRAZIL – President Jair Bolsonaro said on Thursday that the federal government will not oppose the merger agreement between Brazil’s Embraer and the US’s Boeing. According to the president, the agreement between the two companies does not hurt national sovereignty and the interests of the country.
“It has become clear that the sovereignty and interests of the Nation are preserved. The Union does not oppose the progress of the process,” the President said on his Twitter account.
The Brazilian government will continue to hold the so-called ‘golden share’, which gives veto power to Brazil on negotiations.
According Brazilian officials, ongoing projects in the area of defense will be maintained, as well as preservation of the secrecy and priority by the Brazilian government in defining defense projects. With that, the president decided not to exercise the veto power to which he was entitled.
“The President has been informed that the various scenarios have been thoroughly evaluated and that the final proposal preserves national sovereignty and interests. Therefore, the power of veto (to accept the Boeing-Embraer deal) will not be exercised,” informed the Presidency in a note.
With the approval of the Brazilian government, the two companies are free to sign the agreement.
The agreement calls for the creation of a joint venture, in which Boeing would have 80 percent and Embraer, 20 percent.
The joint venture will be led by a team of executives based in Brazil and Boeing will have the operational and management control of the new company. Embraer will have decision-making power for some strategic issues, such as the transfer of Brazilian operations.