The Brazilian government has approved creation of a joint venture for commercial aircraft and services operations between the Boeing company (United States) and the Embraer company (Brazil), 80% of which will be owned by the American company and 20% by the Brazilian company.

As the CFTS portal reported, Boeing announced this in an official statement dated 10 January.

"Embraer and Boeing have welcomed approval by the Government of Brazil of the strategic partnership that will position both companies to accelerate growth in global aerospace markets," Boeing said in the statement.

According to the statement, the closing of the transaction will be subject to shareholder and regulatory approvals and customary closing conditions. Assuming the approvals are received in a timely manner, the transaction is intended to close by the end of 2019.

The deal would have been impossible without the support of the government of Brazil, which owns a "golden share" in Embraer.

As previously reported, the headquarters of the joint venture will be located in Brazil. There are no plans to float its shares on the stock exchange. Embraer’s civil aviation operations will be transferred to the joint venture, but its military and private aircraft units will remain independent.

This deal signals the beginning of a new phase of a global competitive war between the industry’s two giants – Boeing and the Airbus company. The latter signed a partnership agreement with Bombardier (Canada) for production of the Bombardier C Series aircraft in October 2017.

In addition, according to reports, Boeing and Embraer have agreed the terms of another joint venture that will promote and develop new markets and applications for defense products and services, especially the KC-390 multi-mission aircraft, based on jointly identified opportunities. Under the terms of the proposed partnership, Embraer will own 51% of the shares in this joint venture and Boeing the remaining 49%.

As reported, Embraer was founded in 1969 with the help of the Brazilian government. At the time of its privatization in 1994, the company was unprofitable and had debts of more than USD 200 million. Currently, the company is the world’s largest manufacturer of commercial aircraft in terms of revenue. Embraer employs about 18,000 people. Its best models of airliners have 70-100 seats. The new model, the Embraer E2, can carry up to 140 passengers.