8-KOther Events

BOEING CO 8-K Report, Corporate Update (Jan 25, 2019)

Filed January 25, 2019For Securities:BABA-PA

Summary

This 8-K filing announces a significant strategic move by Boeing (BA) to acquire an 80% stake in Embraer's commercial aviation business for approximately $4.2 billion. This transaction aims to integrate Embraer's robust commercial aircraft portfolio into Boeing's operations, creating a new entity named Commercial Aviation Newco. The deal is structured as a contribution of Embraer's commercial aviation assets and liabilities to Commercial Aviation Newco, followed by Boeing's acquisition of the majority interest. In addition to the commercial aviation business acquisition, Boeing and Embraer will establish a joint venture focused on the KC-390 multi-mission aircraft, with Embraer holding a 51% stake and Boeing a 49% stake. This joint venture signals a collaborative approach to developing and marketing this specific aircraft. The transactions are subject to customary closing conditions, including shareholder approval from Embraer and the Brazilian Federal Government's "golden share" consent.

Key Highlights

  • 1Boeing to acquire an 80% interest in Embraer's commercial aviation business for approximately $4.2 billion.
  • 2The transaction involves the formation of a new entity, Commercial Aviation Newco, which will house Embraer's commercial aircraft assets and liabilities.
  • 3A separate joint venture will be established for the promotion and development of the KC-390 multi-mission aircraft, with Embraer owning 51% and Boeing 49%.
  • 4Completion of the commercial aviation deal is contingent on Embraer shareholder approval, including the Brazilian Federal Government's 'golden share'.
  • 5The deal is expected to enhance Boeing's commercial aircraft offerings and market reach.
  • 6This filing falls under 'Other Events' (Item 8.01) as it details significant corporate transactions.

Frequently Asked Questions

The aggregate value for Boeing's acquisition of an 80% interest in Embraer's commercial aviation business is approximately $4.2 billion, subject to certain adjustments.

The transaction is subject to customary closing conditions, which include the requisite vote of Embraer shareholders and the approval related to the Brazilian Federal Government's "golden share." The formation of the KC-390 joint venture is also subject to its own closing conditions and the concurrent closing of the commercial aviation transaction.

For Embraer's commercial aviation business, Boeing will acquire an 80% interest in Commercial Aviation Newco. For the KC-390 multi-mission aircraft, a joint venture will be established where Embraer will own 51% and Boeing will own 49%.

Embraer will contribute certain assets and liabilities related to its commercial aviation business to Commercial Aviation Newco. This new company will then own Embraer’s business of designing, developing, manufacturing, assembling, testing, certifying, marketing, selling, delivering, maintaining, sustaining, and supporting commercial aircraft platforms and programs with structural capacity of 50 or more seats in an all-standard economy class configuration.