Brazil to maintain control over Embraer: Temer

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Brasília (AFP)

Brazilian President Michel Temer on Friday ruled out relinquishing government control over aircraft manufacturer Embraer but said partnership talks with Boeing were welcome.

"We welcome an injection of foreign capital. What we are not considering is a question of transferring" control, Temer said in Brasilia. The government holds a so-called golden share in Embraer, the world's third biggest airplane builder.

Embraer and the US aerospace giant announced Thursday that merger talks were underway, triggering an immediate sharp rise in the Brazilian company's share price.

A merger between the two companies would build on their existing alliance on the KC-39 military plane and would permit the much-bigger Boeing to fill a gap in its fleet with regional single-aisle planes.

A transaction also would rebut an alliance between Boeing archrival Airbus and Canada's Bombardier to build smaller planes.

However the political sensitivity over Embraer's ownership and immediate opposition from the unions means that Boeing is more likely to seek something less than a full takeover, such as a joint venture.