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Embraer Names an Outsider as CEO to Oversee Split of Aircraft Business

Fabiola Moura and Vinícius Andrade
Embraer Names an Outsider as CEO to Oversee Split of Aircraft Business

(Bloomberg) -- Embraer SA is turning to an outsider to lead it through the process of splitting off its commercial-aircraft operations, which will become part of a joint venture with Boeing Co.

Francisco Gomes Neto will replace Paulo Cesar de Souza e Silva as chief executive officer after a shareholders meeting April 22, Embraer said in a statement Tuesday. Gomes Neto resigned as CEO of Marcopolo SA, a maker of trucks and buses.

At Embraer, Gomes Neto “can help the company improve operational performance and expand margins after the closing of the joint venture for commercial aviation with Boeing,” Bradesco BBI analyst Victor Mizusaki said in a note to clients.

In addition to overseeing the separation of Embraer’s commercial-planes lineup, Gomes Neto will lead the remaining businesses making military aircraft and private jets. Silva will become a senior adviser to Embraer’s CEO and board, while John Slattery has been appointed to lead the alliance with Boeing. The U.S. planemaker and its Brazilian counterpart have also formed a smaller venture to market Embraer’s KC-390, a military cargo plane.

Gomes Neto should be “well received by markets,” said Pedro Galdi, an investment analyst at Mirae Asset. “He has a good background as a CEO.”

Embraer’s American depositary receipts were little unchanged at $19.97 at 10:30 a.m. in New York. The ADRs have four buy recommendations, nine holds and one sell. The average 12-month price target of $24.51 implies an upside of about 23 percent, according to data compiled by Bloomberg.

To contact the reporters on this story: Fabiola Moura in Sao Paulo at fdemoura@bloomberg.net;Vinícius Andrade in São Paulo at vandrade3@bloomberg.net

To contact the editors responsible for this story: Nick Turner at nturner7@bloomberg.net, Brendan Case, Julia Leite

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