Boeing has signed a memorandum of understanding (MoU) with Brazil-based plane maker Embraer to gain control over Embraer’s commercial jet business, under a joint venture (JV).

The JV will focus on Embraer’s commercial aircraft and services business with Boeing holding an 80% ownership stake in the JV and Embraer owning the remaining 20%.

The deal, which values Embraer’s commercial aircraft business at $4.75bn, is expected to help both Boeing and Embraer to grow their presence in global aerospace markets.

Pending necessary approvals, the deal is scheduled to be closed next year.

“By forging this strategic partnership, we will be ideally positioned to generate significant value for both companies’ customers, employees and shareholders.”

Boeing chairman, president and CEO Dennis Muilenburg 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.

“This important partnership clearly aligns with Boeing’s long-term strategy of investing in organic growth and returning value to shareholders, complemented by strategic arrangements that enhance and accelerate our growth plans.”

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The proposed JV will be led by Brazil-based management, including a president and CEO, while Boeing will control the operational and management activities, which will report directly to Muilenburg.

Once formed, the JV will be involved in the end-to-end design, manufacturing, and support of commercial passenger aircraft with 70 to more than 450 seats, as well as freighter aircraft.

Boeing and Embraer are set to establish a separate JV to promote and develop new markets and applications for defence products and services, especially the KC-390 multi-mission aircraft.