Brazil's Embraer SA says it has begun an arbitration process against Boeing Co, after the U.S. aerospace giant abruptly canceled a $4.2 billion (¥451 billion) deal over the weekend that had been years in the making.

The deal's collapse was not well-received by investors, who appeared to have hoped until the last minute that the takeover would not fall apart. Boeing shares fell to an eight-year low.

But Brazil's government, which used to own Embraer and is still the company's biggest military client, took a more upbeat tone. It views China as a potential new partner for the plane manufacturer, even though several senior Brazilian government figures have attacked the Chinese government recently.