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Embraer and Boeing confirm merger talks

Boeing and Embraer have confirmed they are in talks for a "potential combination", following a Wall Street Journal report that Boeing is in discussions to take over the Brazilian airframer.

"There is no guarantee a transaction will result from these discussions. Boeing and Embraer do not intend to make any additional comments regarding these discussions," say the two companies.

They add that any potential deal is subject to the approval of the Brazilian government, regulators, both companies' boards and Embraer's shareholders.

A deal with Embraer would give Boeing a new presence in the regional jet market, following Airbus' plan announced in October to acquire a majority stake in the Bombardier CSeries programme.

Any partnership between Embraer and Boeing will allow them to combine forces against the CSeries, which has become the centre of separate trade disputes between Canada and the USA and Brazil respectively.

Earlier this week, the US Department of Commerce sided with Boeing by upholding a proposed hefty tariff on CSeries aircraft imported into the USA. The implementation of the tariff is subject to a final decision by the US International Trade Commission, expected around 1 February 2018.

Brazil has taken action against what it calls unfair state subsidies for the CSeries programme, and a World Trade Organization panel has agreed to look into Brazil's complaints.

Embraer had earlier welcomed the proposed US tariffs against the CSeries, with chief executive Paulo Cesar Silva saying that Embraer believes the move "reinforces the Brazilian government's claim" at the WTO.

Silva, however, had previously acknowledged that action through the WTO might not be the most efficient route, with rulings taking years to emerge.

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