File photo of EMB-170 regional jet during is launch in Sao Paulo state by manufacturer Embraer of Brazil...File photo showing the unveiling of Brazilian aircraft manufacturer Embraer of its regional jet EMB-170, able to carry seventy passengers, in Sao Jose dos Campos on October 29, 2001. Embraer announced September 15, 2004 has suspended plane deliveries to US Airways, calling the airline's request for bankruptcy protection an event of "serious consequences" that could affect its production targets this year and next. But Embraer, the world's fourth-largest manufacturer of commercial aircraft, is sticking to its goal of delivering 160 small and mid-sized planes this year, a spokeswoman for the company told Reuters on Wednesday. According to court documents filed in the United States, US Airways owes Embraer $1.47 billion for future aircraft commitments. REUTERS/Paulo Whitaker/FILE
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Boeing and Embraer said they have approved the terms of a joint venture that will give the US aircraft maker 80 per cent control over the Brazilian company’s commercial aircraft and services operations for $4.2bn.

The companies said the long-awaited transaction now only needs the approval of the Brazilian government and regulatory authorities, which would only be likely to come in the new year.

“The transaction remains subject to approval by the government of Brazil, after which Embraer and Boeing intend to execute definitive transaction documents,” the companies said in a statement.

The announcement follows a decision by a Brazilian federal court earlier this month to block the finalisation of the deal until the new government of president-elect Jair Bolsonaro takes over next month. An appeals court later overturned the suspension of the Boeing-Embraer tie-up.

A nationalist, Mr Bolsonaro’s economic chief Paulo Guedes is pro-privatisation, making approval of the deal likely, analysts say.

To assuage Brazilian government concerns, Embraer’s defence business will remain outside the commercial aircraft venture, with the two companies setting up a separate entity for Embraer’s new military transport aircraft, the KC-390.

“The companies have also agreed to the terms of another joint venture to promote and develop new markets for the multi-mission medium airlift KC-390. Under the cent of this proposed partnership, Embraer will own a 51 per cent stake in the joint venture, with Boeing owning the remaining 49 per cent.”

Additional reporting by Andres Schipani.

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