RIO DE JANEIRO, Feb 23 (NNN-AGENCIES) — A Brazilian judge has suspended negotiations for the tie-up of Brazilian aircraft maker Embraer SA and Boeing Co, according to a court document.
The court issued an injunction suspending an Embraer shareholders meeting scheduled for Feb. 26 that would vote on whether to approve the terms already agreed upon by the two companies.
The decision will likely be appealed to a higher court. Several previous injunctions blocking the progress of the negotiation have been overruled.
Embraer said in a statement that it will take all available measures to maintain the shareholders meeting’ date for Feb. 26. Boeing did not immediately respond to requests for comment.
Federal judge Victorio Giuzio Neto wrote in his decision on a union lawsuit against Embraer that until all alleged illegalities in the negotiating process were evaluated, the shareholders meeting must be suspended.
In the deal, Embraer will sell 80 percent of its commercial plane division for US$4.2 billion to Boeing, which will have total control of the new venture.
In the lawsuit, unions representing Embraer workers said the company’s management did not respect local legislation for listed companies, particularly in respect to what decisions should have been taken to shareholders instead of being made by the company’s management alone.
The Brazilian government, which holds a golden share in Embraer, has already approved the deal. — NNN-AGENCIES