The president of Brazil says his government will exercise its veto power to block the transfer of control of Embraer to Boeing. Michel Temer said Friday the company is not for sale but he would welcome investment from Boeing. “All partnerships are welcome. What is not an option is the transference of control,” said Temer. The Brazilian government has special shareholder status in the company and can veto any decision by the company management and directors. Defense Minister Raul Jungmann said Embraer is a key technology developer in Brazil and handing over control to a foreign company is out of the question. “This is about national sovereignty and national interests, and we cannot negotiate that. The Temer administration understands that sovereignty is non-negotiable,” said Jungmann.
Boeing confirmed on Thursday that it was in talks with Embraer about a “combination” of the two companies but did not elaborate. The announcement came after The Wall Street Journal published a story on Thursday about the meetings. Subsequent reports in various publications used words like “takeover” and “merger” to describe the discussions. The meetings were held as the U.S. Commerce Department confirmed almost 300 percent import duties on Bombardier’s C Series airliners, ruling they were unfairly subsidized by the Canadian government. Boeing and Embraer had both filed protests about the sale of 75 C Series to Delta Air Lines and what they claimed were below-market prices.