12/22/2017 09:12 EST | Updated 12/22/2017 09:14 EST

Boeing And Embraer, Bombardier's Biggest Aerospace Rivals, Are Talking Merger

The two airlines appear to be responding to the Airbus-Bombardier tie-up earlier this year.

Roosevelt Cassio / Reuters
Embraer's E195-E2 commercial jet is pictured in Sao Jose dos Campos, Brazil, March 7, 2017. Embraer is in merger talks with Boeing. The two companies are Canadian manufacturer Bombardier's largest aerospace rivals.

NEW YORK Shares of the aircraft maker Embraer soared on Thursday after the Brazilian company confirmed media reports that it's in talks with Boeing regarding a possible deal.

The Wall Street Journal reported that Boeing Co. would be willing to pay a big premium to buy the company that has a market value of about $3.7 billion.

Boeing would get a bigger footprint in the regional jet industry. That is something that rival Airbus is already attempting to do, with plans to buy a majority stake of the CSeries aircraft project of Canada's Bombardier Inc.

Embraer, however is highly prized by the Brazilian government, which would have to sign off on the deal. The government has veto power over a change in controlling interest in the company.

Embraer and Chicago-based Boeing said Thursday there is no guarantee that a transaction will result from the talks, and they decline to make any further comments.

The U.S. traded shares Embraer SA rose $4.43, or 22 per cent, to close Thursday at $24.42. Boeing's stock slipped $2.87, about 1 per cent, to $295.03.

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