AGM to be decisive in the Boeing-Embraer case

Since July, when Boeing and Embraer signed a letter of intent to form a joint venture, capital market’s participants have been wondering about the impact of the operation for the Brazilian company’s investors and the integrity of the local market. The concern comes from the fact that Embraer will hold only 20% of the new company, dedicated to the production of commercial jets, its main line of business. On account of that and on account of the possibility that the operation is submitted for approval in the Annual General Meeting until the end of the year, Amec published a notice warning the market about the importance of deliberation and of shareholders’ active participation – also in the exercise of the fiduciary duties as provided in the Amec Stewardship Code.
In Amec’s opinion, which has been following the operation through its Technical Commission, investors should get informed of the proposal, discuss it with the company, participate in the meeting and “cast a well-founded vote in this important decision,” the notice says.
The specific characteristics of the case justify the market’s concern. In 2006, Embraer went through a corporate restructuring. Since then, a golden share – a share that provides the Brazilian government with special rights – has been included in the company’s bylaws, in addition to the vote limit for foreign shareholders. Together, the measures allowed the pulverization of Embraer’s capital, which has no controlling shareholder, and preserved its national nature, inhibiting the takeover of the company by foreign parties.
The notice to the market is available here.