Boeing Co on Saturday pulled out of a $4.2-billion deal to buy the commercial jets division of Brazil’s Embraer, unraveling years of work on a transformative move driven by expanding competition with Europe’s Airbus.

The deal’s collapse, first reported by Reuters, is expected to trigger a legal battle as hopes for an alliance spanning from regional to jumbo jets dissolve into behind-the-scenes bickering, though a separate military transporter marketing pact will remain intact.

“Over the past several months, we had productive but ultimately unsuccessful negotiations ... We all aimed to resolve those by the initial termination date, but it didn’t happen,” Boeing senior vice-president Marc Allen, the president of the proposed Embraer partnership, said.

Embraer had no immediate comment.

The collapse of talks halts the second half of a major reshaping of the global duopoly between Boeing and Airbus as both companies sought to expand into regional jets, adding potential new revenues and fresh resources or technology.

In July 2018, Boeing agreed to buy 80 per cent of Embraer’s commercial jet unit after Airbus bought Embraer’s main rival, the CSeries developed by Canada’s Bombardier and since renamed A220. It also eyed lower-cost engineering and manufacturing.

The prospect of an abrupt collapse of the talks was first reported on Friday after discussions over contractual clauses turned sour and sources reported that progress was slow as the clock ticked towards a midnight deadline.