Boeing will buy a controlling stake in the commercial aircraft arm of Brazilian planemaker Embraer under a new $4.75 billion joint venture, the companies said on Thursday, cementing a global passenger jet duopoly.

The new company, encompassing Embraer’s commercial aircraft and services businesses, should make Boeing the market leader for smaller passenger jets, creating stiffer competition for the C-Series aircraft programme designed by Canada’s Bombardier and backed by European rival Airbus.

The deal values Embraer’s commercial aircraft operations, the world’s third-largest, at $4.75 billion and Boeing’s 80 per cent ownership stake in the joint venture at $3.8 billion, the companies said.

Boeing is expected to pay for its share of the venture in cash, according to a person familiar with the matter. The statement gave no indication of any payment Boeing was making under the deal.

Embraer will hold the remaining 20 per cent of the venture and keep control of its defence and business jet operations. Concern over US influence in Brazilian military programmes had raised red flags in Brasilia, which can still veto the deal.

– Reuters