Embraer CEO expects negotiations with Boeing to conclude in the first half of this year

The CEO of Brazilian aircraft manufacturer Embraer SA, Paulo César de Souza e Silva, said on Wednesday that he expects to conclude the negotiations for an alliance with Boeing in the first half of this year.

Silva told reporters at the company's headquarters in Sao Jose dos Campos that talks with the US firm would not be affected by the campaign for Brazilian presidential elections in October, nor because a general of the Army Reserve was named as the new Minister of Defence this week.

The military is leery of any agreement between Embraer and Boeing, due to the importance of the Brazilian company to their defence industry.

Sources close to President Michel Temer have reported that Embraer would own 49% of the new company. But other sources familiar with the negotiations claim that Boeing would only agree to a joint venture in which it owns between 80% to 90% of the new company and in which it had full operational control.

The Brazilian government had opposed a takeover of Embraer by Boeing before this new proposal was tabled for the creation of a third company that includes the passenger aircraft division of the South American firm, while at the same time excluding its defence division.

This week, a spokesman for the Brazilian president said Temer is considering whether he supports this new proposal to create a joint commercial aviation company between Boeing and Brazilian manufacturer Embraer.

Embraer is the third largest aircraft manufacturer in the world and the market leader for regional jets with 70 to 130 seats.