Document details scope & ambition of Boeing-Embraer joint venture

Embraer and Boeing on July 5 formally unveiled their plans to establish a joint venture, carving out the Brazilian manufacturer’s commercial aircraft business and creating a yet-to-be-branded NewCo. The $4.75 billion 80-20% partnership was the culmination of years of industrial courtship between the pair, dating back to Embraer’s contributions on McDonnell Douglas’ MD-11 program.

However, the official Memorandum of Understanding for Strategic Partnership between The Boeing Company and Embraer S.A. signed the same day was not part of either company’s official disclosure. Late last month, the Sao Jose dos Campos Metalworkers Union posted the complete confidential agreement between the companies on its website.

The document appears to bear the signature of Boeing chief financial officer Gregory D. Smith and Embraer chief executive Paulo Cesar de Souza e Silva and details the broad scope and ambition “to facilitate mutual stability and growth” through the strategic joint venture as both companies create the North-South alliance to fend off existing and rising competitors. The agreement lays out the the detailed governance structure and the specific support agreements between the pair — should the partnership be given the blessing of the Brazilian Government and each company’s shareholders.