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Report: Boeing, Embraer Discussions Raise Questions on Brazilian Firm’s Ownership

Talks of a potential combination between Chicago-based Boeing (NYSE: BA) and Embraer have not addressed questions such as the possibility of a joint venture and control over the Brazil-based aircraft manufacturer, Reuters reported Tuesday.

Sources told Reuters that a potential JV might not be an effective measure to meet Boeing’s interest in the Brazilian planemaker’s portfolio of defense programs and regional passenger jets as well as merge engineering resources.

Both companies first announced in December that they were in discussions about a possible tie-up.

The Brazilian government has a “golden share” in Embraer that allows the country to exercise veto power over any takeover deals and other strategic decisions at the company.

Sources noted that Boeing has met sovereignty demands in foreign markets as seen in the establishment of defense businesses in the U.K. and Australia and might use them as reference as it works to advance tie-up talks with Embraer.

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