Embraer to Receive $150 Million From Boeing for Uncompleted Deal — Update

By Denny Jacob

Embraer disclosed it would receive $150 million from Boeing for an arbitration settlement connected to an uncompleted deal between the two companies.

In the early months of the Covid-19 pandemic, Boeing dropped a $4 billion plan to take control of the jetliner business of Brazilian aerospace company Embraer. Boeing at the time said the two sides failed to reach an agreement and opted to walk away from the two planned joint ventures announced in 2018, which had been delayed by regulators.

The settlement comes as Boeing struggles to find its financial footing after its biggest labor union went on strike and its debt mounts from January's Alaska Airlines accident in which a door plug blew off a 737 MAX airliner. The company burned through more than $1 billion a month during the first half of the year amid a quality crisis and a struggling supply base.

As Boeing contends with such issues, Embraer is exploring options aimed at challenging the duopoly for large jets that's been a mainstay of the industry for almost three decades.

The Wall Street Journal in May reported that internal assessments conducted by Embraer determined that the company has the technological know-how and manufacturing might to develop a next-generation narrow-body aircraft, its first in that market segment. The plane could compete head-on with the successors of Boeing's 737 MAX and Airbus's A320 in a category that is key for both manufacturers.

Write to Denny Jacob at denny.jacob@wsj.com