SAO PAULO - A Brazilian judge overturned on Friday a decision that put the brakes on planemaker Embraer’s proposed sale of 80 percent of its commercial aviation division to Boeing Co (BA.N), as the judicial back-and-forth surrounding the deal continued.
According to public news agency Agencia Estado, Federal Judge Therezinha Cazerta suspended a decision which had suspended the sale earlier in the week. Her decision came in response to a request from Brazil’s solicitor general, known as the AGU, which argued that the injunction would hurt the economy and the previous decision represented government overreach into the free market.
Legal challenges to the deal, which would reshape the global passenger aviation market, have been plentiful and are common in Brazilian dealmaking in general.
Boeing and Embraer said on Monday they had finalized the terms of the agreement, valuing the Brazilian planemaker’s commercial division at $5.26 billion. [nL1N1YM097] The agreement needs approval from the Brazilian government because it holds a so-called golden share in Embraer that gives it veto power over strategic decisions and any change in its controlling interest. The planemaker formally sought that approval on Monday and it is expected within 30 days.
On Thursday, a judge issued the now overturned injunction blocking the proposed deal in response to a class action filed by Embraer’s union in Sao Jose dos Campos, where the planemaker is based.
Earlier in December the same judge issued a similar injunction blocking the deal, only to see the injunction swiftly overturned.