Embraer shares take off after Bolsonaro approves Boeing merger
The share price in Brazilian airplane manufacturer Embraer soared Friday as markets reacted favourably to the country's President Jair Bolsonaro approving a merger with US giant Boeing.
The share price jumped 7.43% on the Sao Paulo stock exchange, despite Ibovespa falling 0.28%.
It came a day after Bolsonaro announced he would not be using his veto powers to block the merger between two of the world's three biggest aviation companies.
Embraer's shares had taken a nose dive last week after Bolsonaro had expressed concerns over the deal.
But now the $5.2 billion deal, which will see Boeing take control of Embraer's commercial airplane manufacturing business - 80%of its operation - will go ahead.
Embraer will only retain control of its military division. On Thursday, Bolsonaro had said he was satisfied that 'the final proposal preserves (Brazil's) sovereignty and national interests.'
Embraer was founded as a state group in 1969 before being privatized in 1994, although the Brazilian government retained a 'golden share' giving it the right to veto strategic decisions for the company.
More from Defence Notes
-
US lawmakers warn that “more military spending is absolutely necessary” to ensure Pentagon’s readiness
The US Congress has raised concerns about how inflation rates and cuts in main acquisition programmes could affect the US military.
-
US FY2024 funding package passes as China closes military capability gap
The Pentagon has been operating under temporary funding since October 2023, which has impacted its main acquisition and development programmes, increasing the capability gap between the US and China.
-
NATO outlines future challenges as Ukrainian funding from US stalls
In 2023, defence spending increased by an unprecedented 11% across European NATO countries and Canada. Since 2014, the group has spent an additional US$600 billion on defence.
-
US Pentagon to reduce investments in main acquisition programmes over FY2025
The DoD requested nearly US$850 billion to fund operations over the next fiscal year. Despite the amount being 1% higher than the FY2024 budget request, it has not covered the 3% inflation rate, which could impact the DoD’s main programmes in the medium and long term.
-
Haiti crisis forces Caribbean militaries to prepare for intervention
As gangs gain control of Port-au-Prince, Haiti’s Caribbean neighbours have been preparing to intervene in the failed state, with the US and other partners waiting in the wings with equipment and financial support.