What's going on?

It�s a bird, it�s a plane� it�s a joint venture between US aircraft manufacturer Boeing and its Brazilian counterpart Embraer (tweet this) � valued at a heady $5 billion.

What does this mean?

Boeing will own 80% of the newly-formed company, while Embraer gets 20%. It�ll focus on making and selling smaller aircraft that fly shorter, local routes � Embraer�s specialty, but now bolstered by Boeing�s manufacturing and engineering expertise.

The partnership will also help the US giant to compete with its European rival Airbus, which got into the smaller plane business through a similar deal with Canada�s Bombardier last year. Previously, battles in the sky between Boeing and Airbus were largely confined to big jets like the 747 jumbo.

Why should I care?

The bigger picture: Weak emerging market currencies in 2018 helped Boeing land a cheaper deal.

In 2018, currencies of emerging market countries have become less valuable compared to the US dollar, thanks to weaker-than-expected economies, political tension (in some cases), and investors favoring a booming US as a home for their cash. Brazil�s no exception � its currency has fallen roughly 20% versus the dollar. The weaker Brazilian real makes the country�s assets appear cheaper to foreign buyers, like Boeing (since its cash now buys more reals than it did before).

For markets: Stocks had a mixed response.

Shares of Embraer fell by more than 10% on Thursday � investors probably weren�t surprised to see a deal announced as discussions had been going on for years, and over the last year, the stock had risen over 40%. Boeing�s stock didn�t move much, though investors may fancy the new partnership�s chances to make headway in winning customers who�d otherwise buy small jets from Airbus.