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Elbit Systems Forms JV With Embraer

Harpia Sistemas began as a 2011 AEL–Embraer joint venture, added Avibras in 2013, and had its activities slated to wind up in 2016.
From TheFinanceBase Team2 min to read
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Elbit Systems’ Brazilian subsidiary AEL Sistemas and Embraer Defesa e Segurança established Harpia Sistemas S.A. in September 2011 to pursue unmanned aircraft systems and related services. Avibras joined in 2013, but in January 2016 Elbit announced that Harpia’s activities would be wound up. That announcement did not establish when the company itself was formally dissolved or whether the legal entity still exists.

What was Harpia Sistemas?

Harpia Sistemas S.A. was a Brazilian joint venture formed by AEL Sistemas, Elbit Systems’ Brazilian subsidiary, and Embraer Defesa e Segurança. Its announced scope included unmanned aircraft systems (UAS), avionics, simulators, and contractor logistics support. Elbit’s September 2011 announcement described Brazil as the initial market, with other markets to be determined.

The venture followed an April 2011 strategic agreement between AEL and Embraer Defesa to evaluate joint opportunities in the UAS market. The agreement anticipated a jointly owned company with Embraer Defesa as the majority participant; Harpia’s establishment was announced in September. These are separate milestones, not competing formation dates. (Elbit Systems announcements, April 13 and September 8, 2011.)

Who owned the joint venture?

Stage Embraer Defesa AEL Sistemas Avibras
At formation, 2011 51% 49% Not yet a shareholder
After Avibras joined, 2013 51% 40% 9%

Elbit Systems reported the initial stakes when it announced Harpia’s establishment on September 8, 2011. On February 6, 2013, it announced an agreement for Brazilian company Avibras to enter with a 9% stake; Embraer Defesa retained 51%, while AEL’s share became 40%.

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What happened to Harpia?

On January 7, 2016, Elbit Systems announced an amicable decision to wind up Harpia’s activities, attributing it to Brazilian budget constraints at the time. The announcement said the companies would continue developing technologies in a new format. It did not give a completion date for winding up the activities, confirm formal dissolution of Harpia Sistemas S.A., or establish the entity’s present legal status.

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Sources

  • Elbit Systems, “Elbit Systems’ Brazilian Subsidiary, AEL Sistemas, and Embraer Sign Strategic Agreement Focusing on the UAS Market,” April 13, 2011.
  • Elbit Systems, “Strategic Agreement Implemented Between Elbit Systems and Embraer,” September 8, 2011.
  • Elbit Systems, “Elbit Systems Brazilian Subsidiary, AEL and Embraer Defesa e Segurança, Sign Agreement for the Entrance of the Brazilian Company Avibras to Harpia,” February 6, 2013.
  • Elbit Systems, SEC filing, “Elbit Systems Joint Venture in Brazil, Harpia Sistemas, to Be Wound Up,” January 7, 2016.

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