Boeing-Embraer's Proposed Joint Venture Hits Legal Hurdle in Brazil -- 2nd Update

   By Maria Armental

A Brazilian federal judge again sought to block Boeing Co.'s (BA) proposed takeover of Embraer SA's (ERG, EMBR3.BR) commercial jetliner business, citing Brazil's national and military interests.

A similar challenge this month was reversed on appeal. Embraer said in a statement it also plans to appeal the latest decision.

Under the terms of an agreement that was first announced in July, Chicago-based Boeing would take an 80% stake in Embraer's commercial airplane and services business, and control 51% of the joint venture.

Embraer would have the right to force Boeing to buy the remaining 20% stake over the next decade.

The deal requires approval from Brazil's government, which has a so-called golden share in Embraer that gives it veto power over any such transaction.

In a preliminary decision that was issued Wednesday, Brazilian federal judge Victorio Giuzio Neto again questioned the proposed deal and pointed to a similar move U.S. officials took in thwarting Broadcom Ltd.'s hostile bid for Qualcomm Inc. over national security concerns.

The judge called the Boeing-Embraer venture an uneven relationship that couldn't be carried out without compromising national interests.

Boeing declined to comment on the matter.

--Andrew Tangel contributed to this article.

Write to Maria Armental at maria.armental@wsj.com

(END) Dow Jones Newswires

December 20, 2018 20:32 ET (01:32 GMT)

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