New York Times
Foo Yun Chee
BRUSSELS — EU antitrust regulators should block Boeing's $4.2 billion (£3.27 billion) purchase of Embraer's commercial passenger jet division or demand hefty concessions, the head of Brazilian investor group Abradin said, calling it a killer acquisition.
Aurelio Valporto complained about the deal to the European Commission two months ago, saying it created hurdles to competition in the Brazilian aerospace industry, and on Wednesday took his grievance to Brazil's antitrust watchdog CADE. Abradin represents minority investors.
Boeing is buying 80% of Embraer's commercial jets division, its most profitable, to compete directly with Airbus in the market for planes with fewer than 150 seats.
"It is a killer acquisition, not a joint venture," Valporto said in an interview late Wednesday, referring to deals where companies buy smaller rivals to shut them down, an issue troubling competition enforcers on both sides of the Atlantic.
"Embraer airplanes are competitors of Boeing airplanes. What will be left from Embraer won't survive, and even if it was possible to survive, Embraer wouldn't be able to produce any aircraft with 50 passengers or more," Valporto said.
The deal has already been approved by regulators in the United States, China and Japan.
The Commission, which launched a full-scale investigation into the deal in October, declined to comment.
Boeing said it and Embraer had been engaged with the European Commission and other global regulatory authorities since late last year.
"We continue to co-operate with the European Commission and CADE as they assess our transaction and look forward to a positive resolution," a spokesman for the company said.
The EU has voiced concerns the deal would remove world No. 3 player Embraer from the commercial aircraft industry and from the overall single aisle plane market, an indication that it will demand significant concessions from Boeing to alleviate its worries.
The EU regulator halted its investigation last month while waiting for Boeing to submit data on the deal.
"I think this deal shouldn't be accepted by the EU. If not blocked, it should demand major concessions from Boeing," Valporto said, adding that Boeing should be forced to sell off its single aisle commercial planes.
(Reporting by Foo Yun Chee; Editing by Kirsten Donovan)
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