SAO PAULO, Jan 7 (Reuters) - Brazilian planemaker Embraer SA and a subsidiary of Israel’s Elbit Systems Ltd are shutting down Harpia Sistemas SA, a joint venture formed in 2011 to explore the unmanned aerial vehicles market.
Elbit said in a statement on Thursday the decision to part ways “occurred amicably given the current budget constraints in Brazil.”
President Dilma Rousseff’s austerity push amid a deep recession in Brazil has pinched defense spending and already forced Embraer to put off military programs and forgo $300 million of government revenue in 2015.
Both companies said they would keep developing technologies with the strategic aim of making remotely piloted aircraft in Brazil and expressed an interest in future collaboration.
Embraer and Elbit’s Brazilian subsidiary, AEL Sistemas, had struck a deal in 2013 giving 9 percent of Harpia to Brazilian defense contractor Avibras, which added its unmanned aircraft Falcao to Harpia’s portfolio. As a result, AEL owned 40 percent of the joint venture and Embraer held a 51 percent stake. (Reporting by Brad Haynes and Caroline Stauffer; Additional reporting by Bengaluru newsroom; Editing by Chizu Nomiyama)