Why Shares of Embraer, and Boeing, Are Falling Today

Shares of Embraer (NYSE: ERJ) fell more than 12% on Monday morning after Boeing (NYSE: BA) walked away from a $4 billion deal to acquire a majority stake in Embraer's commercial aviation unit. Embraer has vowed to pursue damages against Boeing, but the termination is a major blow to the Brazilian company at a difficult time for aerospace manufacturers.

Boeing shares are under pressure, too. For now, shareholders should be glad Boeing walked away, but the long-term strategic rationale behind the deal was solid and Boeing will suffer from not having Embraer in-house.

Boeing and Embraer in 2017 announced plans to combine their commercial units, with Embraer seeking a deeper-pocketed partner with a global sales force to help it sell its E2 small jet line and Boeing eager to fill a hole in its product lineup via the E2 jet. But a lot has changed since that deal was announced.

Source Fool.com