Exclusive: Brazil closer to Boeing on jets deal after Biden visit

Tue Jun 4, 2013 6:26pm EDT
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By Brian Winter

SAO PAULO (Reuters) - Brazil is closer to choosing Boeing Co.'s (BA.N: Quote) F-18 for one of the developing world's most sought-after defense contracts after U.S. Vice President Joe Biden addressed the government's main misgivings during a visit to Brasilia, officials told Reuters.

Biden met with President Dilma Rousseff on Friday and assured her that the U.S. Congress was likely to respect Boeing's agreement to transfer sensitive technology to Brazil as part of the deal, three officials who were present said on condition of anonymity.

The deal will involve 36 jets worth about $4 billion, with probable follow-up orders that would greatly increase the value of the contract over time. That makes it a critical prize for defense companies at a moment when the United States and many European countries are tightening military budgets.

The other finalists are France's Dassault Aviation SA AVMD.PA and Sweden's Saab AB (SAABb.ST: Quote).

Rousseff has not made her final decision, and the timing for an announcement remains unclear, the officials stressed.

But they said Rousseff's comments to Biden and other recent developments suggest a preference for Boeing, with a decision possible before she makes a state visit to the White House to see President Barack Obama in October.

"If it's Boeing, Biden will deserve much of the credit," one senior Brazilian official said.

Rousseff's main concern with Boeing's bid has been that the U.S. Congress could block technology transfers because of national security concerns. Brazil has cordial relations with the United States but angered some legislators in recent years through its interactions with Iran, Venezuela and other countries that antagonize Washington.   Continued...

A F/A-18E Super Hornet fighter jet assigned to the Kestrels of Strike Fighter Squadron (VFA) 137 launches from the flight deck of the aircraft carrier USS Abraham Lincoln in this U.S. Navy handout photo dated February 13, 2012. REUTERS/U.S. Navy/Mass Communication Specialist 2nd Class Colby K. Neal/Handout