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CHICAGO (Reuters) - The head of Boeing Co (BA.N) said on Thursday the U.S. planemaker can absorb transactions on the scale of a proposed tie-up with Brazil’s Embraer without putting at risk internal investments in its business or returning cash to shareholders.

FILE PHOTO: Dennis Muilenburg, CEO of The Boeing Company, arrives at Trump Tower in New York City, U.S. January 17, 2017. REUTERS/Stephanie Keith

Chairman and Chief Executive Dennis Muilenburg also told Reuters in an interview that Boeing was “making progress” in talks with the Brazilian aerospace company. It continues to study a number of possible structures for a deal, which some outside analysts have said could value Embraer at $5-6 billion.

“Acquisitions of the scale of Embraer are not only very doable for us, they are also things we can selectively do, aligned with our (cash deployment) strategy,” Muilenburg said.

“We have plenty of cash horsepower to do all three things: invest organically, return to shareholders and then make these targeted acquisitions,” he added.

Brazilian President Michel Temer is weighing a proposal for the two companies to forge a commercial aviation venture, his office said last week, after the government opposed an outright takeover of Embraer which also builds military aircraft.

“We are not done yet; there is still work to go. But we are making progress so I am hopeful that we can complete it,” Muilenburg said, reiterating the deal was not a “must” for Boeing.

“We continue to evaluate all parts of the enterprise, different potential ownership structures” that range from support to full ownership, he said.

Boeing shares closed up 0.5 percent at $348.73.

Asked whether such overseas tie-ups were more difficult with rising protectionist sentiment, Muilenburg said Boeing would not let up on its global expansion which, if done strategically, would create jobs in the United States and abroad.

OPEN TRADE

Speaking in his office overlooking Lake Michigan, not far from a former Chicago steelworks, Muilenburg declined to be drawn on the issue of steel and aluminum tariffs just prior to U.S. President Donald Trump’s announcement about them on Thursday.

He reiterated his longstanding general support for open trade. “Our position is we want free and open trade, good solid global trade is good for our business and we are going to be strong proponents of that,” he said.

Muilenburg downplayed concerns of a backlash from China, which has ordered thousands of jets. Boeing plans to open a new aircraft completion plant in China.

“You see some tough rhetoric but when I look below the surface, and having talked with both President Trump and President Xi (Jinping), I think there is a true desire to have a productive trade relationship between the two countries,” he said.

Muilenburg said Boeing had not decided whether to appeal after losing a price dumping case against Canada’s Bombardier (BBDb.TO) but would sue again if provoked to do so again.

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