Boeing strikes aircraft deal with Brazil's Embraer

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Boeing has agreed a deal that will give it control of Embraer's commercial jet business.

The proposed joint venture will give the US aerospace giant a significant stake in the market for smaller passenger planes.

Boeing has been courting Brazil's Embraer for some time.

The need for a deal has recently become more pressing since its European rival, Airbus, took control of Bombardier's C-Series regional jet programme.

Its deal with the Canadian company had threatened to give Airbus a significant advantage in the global marketplace.

The agreement, which values Embraer's commercial aircraft operations at $4.75bn, will restore parity between Boeing and Airbus.

Under the proposed deal, Embraer's commercial business will be placed in a new joint venture, with Boeing holding an 80% stake worth $3.8bn (£2.9bn).

Embraer is a Brazilian industrial champion and a major manufacturer of military systems.

News of the deal sent its shares down more than 10% in Sao Paulo on Thursday. Some investors had hoped Embraer's share of the joint venture would be higher than 20%.

Dennis Muilenburg, Boeing chief executive, said: "By forging this strategic partnership, we will be ideally positioned to generate significant value for both companies' customers, employees and shareholders - and for Brazil and the US."

Boeing said the deal is expected to close by the end of 2019 pending the necessary approvals.