January 26, 2018 / 12:22 AM / 4 months ago

Brazil defense minister tells Saab no control change for Embraer

RIO DE JANEIRO (Reuters) - Brazilian Defense Minister Raul Jungmann told Saab SAABSb.ST Chief Executive Officer Hakan Buskhe that the transfer of control of Embraer EMBR.SA to Boeing (BA.N) is off the table, the defense ministry said in a statement on Thursday.

Brazil's Defense Minister Raul Jungmann speaks during a news conference for foreign journalists in Brasilia, Brazil, May 17, 2017. REUTERS/Ueslei Marcelino

Jungmann also ruled out a spin-off or sale of Embraer’s defense or commercial units, the statement added. Saab and Embraer are partners in the development of the Gripen NG fighter.

“We are concerned and contractually committed to maintaining control and confidentiality in the transfer of technology developed both by Saab and jointly” with Embraer, Jungmann said according to the ministry.

    U.S. planemaker Boeing proposed a tie-up with Embraer in December, but the plans have faced resistance from Brazil’s government, which has a so-called golden share, giving it a right to veto any change of control.

    Jungmann has asked the Air Force as well as the Defense and Finance Ministries to keep Saab executives informed of any progress in talks between the companies, adding that any deal would mean building safeguards for Saab with its input.

    Reporting by Marta Nogueira; Editing by Cynthia Osterman

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