Feb. 26 (UPI) -- Shareholders of Embraer approved a proposal Tuesday by which Boeing will pay $4.2 billion to the Brazilian aircraft maker to establish a joint venture where Boeing will own 80 percent.
The proposal was approved by 97 percent, with participation of about 67 percent of the outstanding shares, according to a communication sent to the Brazilian stock exchange.
Shareholders authorized company management to carry out all actions needed for the merger, including transfers of liquid assets.
"Shareholders approved the proposal that will establish a joint venture made up of the commercial aircraft and services operations of Embraer," Boeing said separately Tuesday.
"The transaction values 100 percent of Embraer's commercial aircraft operations at $5.26 billion, and contemplates a value of $4.2 billion for Boeing's 80 percent ownership stake in the joint venture."
Embraer shareholders also agreed to promote and develop new markets for the multi-mission military KC-390. Under the terms of the partnership, Embraer will own a 51 percent stake in the joint venture, with Boeing owning the remaining 49 percent.
Embraer's defense and executive jet business and services operations associated with those products would remain as a standalone traded company.
"Our shareholders have recognized the benefits of partnering with Boeing in commercial aviation and the promotion of the multi-mission airlift KC-390, as well as understanding the opportunities that exist in the executive aviation and defense business," said Nelson Salgado, Embraer executive vice president of finance and investor relations.
The companies announced the venture in December.
Embraer will continue to operate the commercial aviation business and the KC-390 program independently until the closing of the operation, Boeing said.
The shareholders act included a written declaration of two Brazilian shareholders who opposed the vote, saying they did so "because it is contrary to national interests, violates sovereignty, and threatens the working class."
Embraer was created in 1969 with the project of building the first Brazilian plane, named Bandeirante. Embraer Defense and Security is the leading aerospace and defense industry in Latin America. Its products include the A-29 Super Tucano.