Boeing to pay $150M settlement to Embraer for scuttled deal

Embraer (NYSE:ERJ) disclosed Monday it will receive $150M from Boeing (BA) in an arbitration settlement related to Boeing’s uncompleted $4B plan to take control of the jetliner business of Brazilian company.

Boeing (BA) walked away from the proposed deal at the height of the COVID-19 pandemic, even as the combination would have given Boeing access to Embraer’s (ERJ) engineers to design a new, mid-range jet family as well as its existing range of smaller jets that compete against Airbus’ smallest A220 model.

The settlement forces the U.S. company to hand over funds at a time when it is bleeding cash at a rate of more than $1B per month during this year’s H1 amid a quality crisis and a struggling supply base.

Meanwhile, The Wall Street Journal reported in May that internal assessments conducted by Embraer (ERJ) determined the company has the technological expertise and manufacturing capability to develop a next-generation narrowbody aircraft, which would be its first in that market segment.