December 20, 2018 / 12:30 PM / a month ago

Investors association asks for tender offer in Boeing-Embraer deal

FILE PHOTO: The logo of Brazilian aviation company Embraer is seen during the Latin American Business Aviation Conference & Exhibition fair (LABACE) at Congonhas Airport in Sao Paulo, Brazil August 14, 2018. REUTERS/Paulo Whitaker/File photo

RIO DE JANEIRO (Reuters) - Brazilian investors’ association Abradin has filed a motion with a São Paulo court questioning the legality of a tie-up between U.S. planemaker Boeing Co (BA.N) and Embraer SA (EMBR3.SA).

The motion asks the court to determine whether Embraer shareholders should be eligible for a public tender offer. Abradin could bring legal action against the deal if a public tender is not launched.

“We understand that this is an illegal operation,” Abradin’s president, Aurelio Valporto, told Reuters.

Embraer’s bylaws ensure an offer to all shareholders with a 50 percent premium over market prices if any investor buys 35 percent or more of the company.

Embraer and Boeing finalized a deal this week in which Embraer will sell 80 percent of its commercial jet unit, netting $3 billion in proceeds.

Both companies did not immediately comment on the matter.

Reporting by Rodrigo Viga Gaier and Marta Nogueira; Writing by Gram Slattery; Editing by Frances Kerry

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