Boeing will pay Embraer $150 million in compensation for backing out of plans to buy its civilian aircraft business in 2020, the Brazilian aircraft manufacturer said Monday.
After lengthy negotiations, Boeing abandoned plans to buy 80 percent of Embraer’s civilian activities for $4.2 billion in the midst of the Covid-19 crisis in April 2020.
Boeing argued it had the right to terminate the acquisition as Embraer had “not met the necessary conditions.”
However, Embraer said the move was illegal, accusing the US aviation giant of having “used fallacious arguments as a pretext for not fulfilling its commitment to conclude the transaction.”
The two companies reached an agreement on compensation during arbitration proceedings.
“According to the agreement reached between the two parties, Boeing will pay $150 million to Embraer,” the Brazilian manufacturer said in a statement posted on the website of the stock exchange authority.
Boeing said in a statement it was “pleased to have concluded the arbitration proceedings with Embraer.”
Boeing, which has gone through a period of strong turbulence, said Monday it was considering serious spending cuts amid a factory worker strike in the northwestern United States.