International regulators' decision to ground the 737 MAX in March 2019 is likely to cost the aerospace giant more than $20 billion in added expenses, penalties to customers, and advanced payments to keep the supply chain running.Which means, in the near-term, Boeing has one more thing on its plate. The deal falling apart leaves a gaping hole in Boeing's product offering.Unfortunately for Boeing, smaller-sized jets seem likely to be big sellers in the years to come. In press release, Marc Allen, president of Boeing's Embraer partnership unit, called the decision "deeply disappointing" but said "we have reached a point where continued negotiation ... is not going to resolve the outstanding issues. It appears the talks leading up to Boeing's decision to terminate were tense. Embraer is likely to find the challenge much more difficult on its own.Like us on Facebook to see similar storiesBuying Embraer, regardless of the price, is arguably a distraction Boeing doesn't need right now.
Furthermore, buying Embraer at the agreed price would have been a tremendous drain on scarce cash resources.Stock Advisor launched in February of 2002. International regulators' decision to ground the 737 MAX in March 2019 is likely to cost the aerospace giant more than $20 billion in added expenses, penalties to customers, and advanced payments to keep the supply chain running.Which means, in the near-term, Boeing has one more thing on its plate. Embraer shares look set to plummet on Monday following Boeing's decision to walk away.Nevertheless, Boeing's rationale for wanting to buy Embraer was solid.
Even that Embraer valuation likely was inflated due to the pending deal. For potentially the rest of the decade, Boeing's commercial fortunes largely will be dictated by the success of the still-grounded 737 MAX.As a result, heading into the weekend Boeing was nearing a deal to pay more than four times what investors currently feel the Embraer assets are worth.
For potentially the rest of the decade, Boeing's commercial fortunes largely will be dictated by the success of the still-grounded 737 MAX.As a result, heading into the weekend Boeing was nearing a deal to pay more than four times what investors currently feel the Embraer assets are worth. "Please give an overall site rating:Ideally, the two sides can now return to the table and work out a compromise. Prior to the pandemic, global airlines were already shifting away from larger jets and toward smaller planes. Embraer's new generation E2 jets would have slotted in below the 737, giving Boeing an attractive offering for customers looking for a plane that size.Boeing is also much less flush with cash than it was two years ago.
Target pricing at which a trader projects that a buyer will buy a product. However, that might be easier said than done. Buying Embraer, regardless of the price, is arguably a distraction Boeing doesn't need right now. Furthermore, buying Embraer at the agreed price would have been a tremendous drain on scarce cash resources. Target Price of the company Embraer S.A. recorded at $9.61. Even that Embraer valuation likely was inflated due to the pending deal. ERJ: Get the latest Embraer stock price and detailed information including ERJ news, historical charts and realtime prices. Even combined, Boeing/Embraer faced an uphill battle selling the E2.
Embraer shares look set to plummet on Monday following Boeing's decision to walk away.Nevertheless, Boeing's rationale for wanting to buy Embraer was solid. Prior to the pandemic, global airlines were already shifting away from larger jets and toward smaller planes. Historical Performance In The News:
"Embraer believes strongly that Boeing has wrongfully terminated the [master transaction agreement], that it has manufactured false claims as a pretext to seek to avoid its commitments to close the transaction and pay Embraer the $4.2 billion purchase price," the company said.
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