December 7, 2018 / 12:16 PM / a year ago

Brazil's government joins Embraer in challenging injunction of tie-up with Boeing

FILE PHOTO: The logo of Brazilian planemaker Embraer SA is seen at the company's headquarters in Sao Jose dos Campos, Brazil February 28, 2018. REUTERS/Roosevelt Cassio/File Photo

SAO PAULO (Reuters) - Brazil’s government said on Friday that it would appeal an injunction issued Thursday blocking a proposed tie-up between planemakers Embraer and Boeing , joining Embraer, which has also said it will challenge the decision.

The Brazilian government will appeal through its solicitor general.

Embraer announced in July its intention to sell 80 percent of its commercial aviation business to Boeing for $3.8 billion. Embraer has said the deal is crucial for its survival.

Meanwhile, Boeing’s takeover is widely seen as a response to a similar deal earlier this year, in which Airbus took a controlling stake in the commercial segment of Canada’s Bombardier Inc , which used to directly compete with Embraer.

The Embraer deal has stalled since July partly because the Brazilian government, which has veto power over any significant business decisions, has been reluctant to approve it.

Embraer needs government approval, a remnant of when the company was state-owned before its privatization in the 1990s, before it can formally present the deal with Boeing to its shareholders.

Reporting by Marcelo Rochabrun; Editing by Chizu Nomiyama and Bernadette Baum

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