Embraer S.A. (the “Company” or “Embraer”) hereby informs its shareholders and the market in general that, on this date, it has entered into a preliminary and non-binding memorandum of understanding, with The Boeing Co. (“Boeing”), through which the parties have established the basic premises for a potential combination of certain businesses (“Memorandum” and “Transaction”, respectively) as detailed below. The execution of the Memorandum was duly authorized by Company’s Board of Directors at a meeting held on this date.
The Transaction will include the creation of a joint venture between the Company and Boeing, in the form of a Brazilian company (the “New Partnership”), which will operate the commercial aviation business currently being operated by the Company and combined with the operations of the New Partnership. Boeing will acquire, upon payment to the Company, shares issued by the New Partnership, so that the Company and Boeing will hold 20% and 80% of the total capital and voting stock of the New Partnership, respectively.
The executive jets and defense & security business units, among others, will not be accessible to the New Partnership and will continue to be developed and operated by Embraer.
The following chart demonstrates the corporate structure after completion of the Transaction:
The Transaction also contemplates the facts and assumptions indicated below.
With the implementation of the Transaction, the Company will remain a Brazilian publicly-listed company, registered in Category A with shares listed in the special segment Novo Mercado of the B3 S.A. – Brasil, Bolsa, Balcão. The Government of Brazil will preserve rights derived from its ownership of the ordinary share, with special voting rights, issued by the Company (golden share), under the terms set forth in the Company’s Bylaws.
In addition, in order to enable mutual growth and stability of the business, the parties involved in the Transaction will enter into long-term operating contracts involving engineering services, reciprocal intellectual property licenses, research and development agreements, agreement to share the use of certain establishments, agreement to provide preferential treatment in the supply of certain products and components and an agreement to maximize potential opportunities in the supply chain.
The Transaction includes the transfer by the Company to the New Partnership of the commercial aviation business currently being operated by the Company (assets and liabilities), as well as the transfer of related operations, services and engineering capabilities. The Company will retain the executive jets and defense & security business units, as well as the related operations, services and engineering capabilities.
The parties to the Transaction will create another joint venture for the promotion and development of new markets and applications for defense products and services, notably the KC 390 multi-mission aircraft, on jointly identified opportunities.
2. Financial Terms
The amount attributed by the parties involved in the Transaction for the New Partnership that will own 100% of the commercial aviation business is US$4.75 billion, subject to potential adjustments, of which Embraer will acquire 20% and Boeing 80%, which contemplates a value of US$3.8 billion for Boeing’s 80% ownership stake in the New Partnership. This amount will be confirmed in due diligence to be conducted by Boeing and will be subject to usual adjustments to reflect changes in working capital and net debt of the New Partnership. It is not yet possible to determine the net effect of the Transaction on the Company’s financial position and results.
3. Corporate Governance of the New Partnership
The New Partnership will be a company with operations, management and headquarters in Brazil.
The New Partnership will be administered by a Board of Directors and a Management Board, both bodies composed of professionals with appropriate qualifications to fill their respective positions, and Boeing shall have control of the New Partnership.
The Company shall have governance rights and shall be entitled to veto certain matters, subject to terms and conditions to be established in the definitive documents.
The New Partnership will have anti-dilution policy and a dividend policy with the objective of protecting the Company’s investment in the New Partnership.
In order to align the interests of the parties in the partnership resulting from the Transaction, as a general rule, the Company and Boeing will not be able to dispose of their respective shares issued by the New Partnership for a period of 10 years from the closing of the Transaction (the “Lock-Up Period”).
In addition, the final documents should provide for further provisions regarding the transfer of shares, including the right of first offer, tag-along rights and drag-along rights, in terms customary for transactions of this type, and in compliance with the Lock-Up Period. Under certain circumstances, the Company will have the right to sell its interest in the New Partnership to Boeing, as customary in transactions of this nature.
4. Necessary Final Documents and Approvals
As of this date, the Company and Boeing will begin negotiations of the definitive agreements for the Transaction, which shall set forth in a binding manner, the structure and financial terms of the Transaction on mutually satisfactory bases. In the event that the parties reach a consensus on such definitive documents of the Transaction, Embraer will consult the Brazilian Government, and the parties shall submit necessary approvals for completion of the Transaction, including among others, (i) approval by the Brazilian Government; (ii) approvals by the competent corporate bodies of both parties involved in the Transaction; and (iii) approval of the competent regulatory authorities.
Accordingly, it is not possible at this time to provide any guarantee as to entry into definitive agreements or the consummation of the Transaction.
5. Other Relevant Information
Until the actual consummation of the Transaction, both parties will conduct their businesses completely separate and independent from one another. Therefore, customers, suppliers, employees and other third parties should not expect any change in the composition of management, business relationships, supply agreements and supply of products during this period from the Transaction.
If the definitive documents are entered into and all necessary authorizations are obtained by the governmental authorities in a timely manner, the Company expects the Transaction to close by the end of 2019.
The Company will keep its shareholders and the market in general informed about any new material information with respect to the Transaction.
EU to extend COVID-19 vaccine export controls as AstraZeneca shipment blocked – sources
By Francesco Guarascio, John Chalmers and Giselda Vagnoni
BRUSSELS (Reuters) – The European Union is planning to extend its export authorisation scheme for COVID-19 vaccines to the end of June, two EU sources told Reuters on Thursday, as a shipment of AstraZeneca shots from the EU to Australia was blocked.
Extending controls could reignite tensions with countries who rely on shots made in the EU.
Under the scheme, companies must get an authorisation before exporting COVID-19 shots, and may have export requests denied if they do not respect their supply commitments with the EU.
The mechanism was set up at the end of January as a reaction to vaccine makers’ announcements of delays in the deliveries of COVID-19 vaccines to the bloc.
It is due to expire at the end of March, but the European Commission wants to extend it through June, the two officials said.
“The Commission will propose its extension into June. And that was greeted by the member states with approval, not necessarily enthusiasm, but there is a feeling that we still need that mechanism,” one senior EU diplomat said.
The second official added that at a meeting with EU diplomats on Wednesday, many countries supported the measure, including heavyweights Germany and France.
The EU Commission was not immediately available for a comment.
Italian Prime Minister Mario Draghi has also called for sanctions on companies that do not respect their contractual obligations with the EU.
When the EU’s export control mechanism was introduced in late January it triggered an outcry from importing countries who feared their vaccine supplies might be affected.
On Thursday two separate sources told Reuters the EU blocked a shipment of AstraZeneca’s vaccine destined for Australia after the drug manufacturer failed to meet its EU contract commitments.
The sources said AstraZeneca had requested permission from the Italian government to export some 250,000 doses from its Anagni plant, near Rome.
Australian lawmakers said they were unfazed. Health Minister Greg Hunt said the country had already received its first shipment of the vaccine, which would be enough until a batch being produced domestically by CSL Ltd was completed.
“This is one shipment from one country,” Hunt said in a statement.
“This shipment was not factored into our distribution plan for coming weeks,” he added.
In January, AstraZeneca cut its supplies to the EU in the first quarter to 40 million doses from 90 million foreseen in the contract, and later told EU states it would cut deliveries by another 50% in the second quarter. AstraZeneca later said it was striving to supply missing doses for the second quarter from outside Europe.
Until the decision to bloc the shipment to Australia, the EU had authorised all requests for export since the scheme’s debut on Jan. 30 to Feb. 26, which amounted to 150 requests for millions of shots to 29 countries, including Britain, the United Arab Emirates and Canada, an EU Commission spokeswoman said.
She added, however, that at least one other request was withdrawn by an exporting company. She declined to elaborate.
Export requests mostly concern the Pfizer-BioNTech vaccine which is manufactured in Belgium. AstraZeneca and Moderna shots have also been exported from the EU.
Since Jan. 30 more than 8 million vaccines were shipped from the EU to Britain, a third EU source said.
Britain has so far prevented the export of AstraZeneca vaccines to the EU, using a UK-first clause in its supply contract with the Anglo-Swedish firm, EU officials have said.
The United States also has regulations that effectively ban vaccine exports, the head of the European Commission, Ursula von der Leyen, told a news conference last week.
(Reporting by Francesco Guarascio @fraguarascio, John Chalmers and Giselda Vagnoni, with additional reporting by Byron Kaye in Sydney; Editing by Toby Chopra and Sonya Hepinstall)
Duo glide around world’s largest fountain in Dubai
Paragliders Llorens and Goberna take magical flight above the Palm Fountain.
Horacio Llorens and Rafael Goberna defied gravity to perform The Breaking Pointe flight around the world’s biggest fountain at The Pointe, Palm Jumeirah in Dubai. Here is all you need to know:
– Spaniard Llorens is a five-time world champion and Infinity Tumbling Guinness World Record holder, who has performed a series of spectacular projects during the last five years including paragliding with a flock of starlings and with the beautiful Aurora Borealis as a backdrop.
– Brazilian Goberna was a Guinness Book of World Records winner at only 12-years-old and, in December 2016, he took to the skies above one of the seven wonders of the natural world when paragliding at Iguazu Falls.
– This time around, the duo teamed up in Dubai to showcase The Palm Fountain at the Pointe, Palm Jumeirah. They overcame a tricky preparation period to expertly glide between the fountain’s powerful jets of water.
– Spanning across the boulevard, the Palm Fountain features two giant floating platforms covering 14,000 square metres of sea water. Reaching an impressive 105 metres high and lighting up the Dubai sky with 3,000 LED lights, the fountain “dances” to hit songs from sunset until midnight.
– They undertook training first at Paramotor Desert Adventure on January 12 to test out their brakes and motors with technician Ramon Lopez finally arriving after being held up by the heavy snow in Madrid.
– Training was crucial for the challenge of flying during the night with low visibility as safety director Alan Gayton ensured they had a reserve parachute in case of a technical issue with the main parachute. Llorens and Goberna also had to study the movement of the water with great precision in order not to get caught up in the jets of water
– Flying over water, it was also mandatory to have a lifejacket with rescue boats, jet skis and divers on hand which came handy when Goberna suffered a technical malfunction on the first January 14 practice run.
– After repairs long into the night, they returned to Paramotor Desert Adventure to test out the motors again before completing the stunning flight on January 15 with Llorens and Goberna performing in harmony.
– Llorens, 38, revealed: “As soon as we got the opportunity, we wanted to fly there. We needed to know the area really well beforehand and we needed to know how to ‘play’ with the fountain – this was new for us. Such strong streams of water shooting 100 metres up is a lot, so we had to be really prepared.”
– Goberna, 26, explained: “The motor wasn’t flying so good because, prior to arriving in Dubai, it was last used in Europe at high altitude. I needed to adjust the carburettor in the air inside the motor. In the first practice flight over the water, I broke one propeller. I really couldn’t understand what was happening and then another one broke. Eventually, a backup motor was required. After a long journey, the final result was beautiful! The team worked incredibly hard to make it.”
– Llorens added: “The highlight for me was playing between the super shooters with Rafael, because it’s something we’ve never done before; it felt really new and really powerful.”
EU sets itself jobs, training and equality targets for 2030
By Jan Strupczewski
BRUSSELS (Reuters) – The European Commission on Thursday announced goals for the 27-nation bloc to reduce poverty, inequality and boost training and jobs by 2030 as part of a post-pandemic economic overhaul financed by jointly borrowed funds.
The EU executive arm said the European Union should boost employment to 78% in 2030 from 73% in 2019, halve the gap between the number of employed women and men and cut the number of young people neither working nor studying to 9% from 12.6%
“With unemployment and inequalities expected to increase as a fallout of the pandemic, focusing our policy efforts on quality job creation, up- and reskilling and reducing poverty and exclusion is therefore essential to channel our resources where they are most needed,” the commission said.
The goals, which will have to be endorsed by EU leaders, also include an increase in the number of adults getting training every year to adapt to the EU’s transition to a greener and more digitalised economy to 60% from 40% now.
Finally, over the next 10 years, the EU should reduce the number of people at risk of poverty or social exclusion by 15 million from 91 million in 2019.
“These three 2030 headline targets are deemed ambitious and realistic at the same time,” the commission said.
The goals are part of the EU’s set of 20 social rights, agreed on in 2017, to make the EU more appealing to voters and counter eurosceptic sentiment across the bloc.
They say everybody has the right to quality education throughout their lives and that men and women must have equal opportunities in all areas and be paid the same for work of equal value.
The unemployed have the right to “personalised, continuous and consistent support”, while workers have the right “to fair wages that provide for a decent standard of living”.
(Reporting by Jan Strupczewski; Editing by Nick Macfie)
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