Embraer stock jumped by more than 22% to close $24.47 on Thursday, while Boeing shares fell slightly by about 1% to $295.16. Embraer shares had been temporarily halted during midday trading.
The Chicago-based company would be willing to pay a "relatively large premium" for Embraer, which has a market value of about $3.7 billion, according to a Wall Street Journal report, citing people familiar with the matter.
The two companies confirmed that they held discussions on a potential combination, but said there is no guarantee that a transaction will result from these discussions.
The takeover talks are reportedly on hold as Boeing and Embraer wait to hear from the Brazilian government on whether it would approve the deal. The Brazilian government has a "so-called golden share in Embraer that gives it veto powers over such a transaction," the Journal reported.
If Boeing were to acquire Embraer it would help strengthen its footprint in the regional jet industry, which would allow it to better compete with rival Airbus SE (EADSY) that recently announced plans to buy a majority stake of Canada's Bombardier Inc. (BDRAF) .
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