2018.02.2820:16:00UTC+00EMBRAER: Agreement With Boeing Expected In The First Half Of 2018

Brazilian aircraft maker Embraer chairman, Paulo Cesar de Souza e Silva, is confident in an agreement with U.S.'s Boeing in the first half of this year.

"I hope we can find a solution because we can not stay in talks for a long time," he said.

According to him, there is a technical group of the Brazilian government assessing the alternatives for the partnership between the companies. The market has been waiting for a breakthrough in negotiations between Boeing and Embraer since late last year, when the companies acknowledged that were in talks about a potential deal.

Silva said the government is interested in enabling the partnership between Embraer and Boeing and seeking solutions to the negotiations.

"They have an interest too, we just have to find the right shape, and most importantly, there is a government focus for the partnership to happen soon," he said.

The Brazilian government has a special share (golden share) at Embraer that allows it to veto certain company decisions, including changes to the major shareholder.

President Michel Temer has suggested in previous statements that he could accept a new investor in Embraer, provided that the deal kept the current controlling shareholders.

Silva ruled out that a possible merger or partnership with Boeing could lead to layoffs. He added that any agreement would make Embraer bigger than it is today, not smaller.

"This is a question that has arisen but does not make sense. The partnership project is precisely to make Embraer a bigger company that will receive more technologies, which is a robust project to make the company even stronger," he said.

Several rumors about the structure of the transaction have been on the market since the end of last year. The latest one said that Boeing had proposed the creation of a company that would house Embraer's commercial aviation area, with Boeing having a stake of at least 80% in the new company. Embraer denied the reports.

Embraer is the third largest manufacturer of commercial jets per revenue and has about 18,000 employees. It is known for manufacturing jets in the range of 70 to 100 seats. Boeing is the largest aerospace company in the world, with a market value of about $ 180 billion, and manufactures commercial airplanes and defense, space and security systems, as well as military aircraft, weapons, satellites, and helicopters.