SAO PAULO – Embraer (NYSE: ERJ) has hired consultancy firm Oliver Wyman to help it explore the U.S. defense market, the head of the Brazilian planemaker’s defense unit said, as it eyes selling its C-390 military cargo aircraft to the world’s No. 1 economy.
Expanding its presence abroad with more sales of the C-390 – a competitor of Lockheed Martin’s C-130 Hercules – has been a key goal of Embraer’s defense division, which had already designated the United States as a key market in the sector.
Embraer (NYSE: ERJ) kicked off the project with Oliver Wyman roughly a month ago and is “fully engaged” in building a strategy to penetrate the U.S. market with its defense portfolio, the firm’s defense CEO Bosco da Costa Jr. told Reuters.
“We looked at several consultancies as part of a careful selection process, evaluating their capacity in the defense field, and concluded that Oliver Wyman is the company that will help us,” Costa said in an interview on Thursday.
Oliver Wyman is owned by Marsh & McLennan (NYSE: MMC).
The executive emphasized that exploring merger and acquisition possibilities could be a way for Embraer to access the U.S. market.
“We have studied this and Oliver Wyman showed us that one of the ways that several industries found to penetrate the U.S. was M&A. So this is one of the possibilities. Embraer will evaluate it,” Costa said.
Embraer Defense already has a footprint in the U.S., which, for example, flies the Super Tucano light attack aircraft. The company has a production line for the turboprop in Jacksonville, Florida. But clinching C-390 sales there would be a game changer.
Speaking at an event earlier on Thursday, Costa said he sees room for the U.S. to have a mixed fleet of larger strategic tankers and smaller tactical tankers such as the C-390, which some NATO countries have already bought.
In addition to Embraer’s home country Brazil, nations like the Netherlands, Portugal, Hungary, Austria, the Czech Republic, and South Korea have tapped the aircraft for their fleets.
“Any defense player in the world cannot be out of that market,” Costa said of the U.S., noting the C-390 has enough U.S. content to meet local requirements. “It is a strategic project that the company’s board has been following.”
(Source: ReutersReuters)
