France, Brazil close to inking $7.2 billion deal for Rafale fighters

Brasilia: Brazil has said it will begin final negotiations with France's Dassault Aviation for the purchase of atleast 36 Rafale fighter jets and that it expects a "competitive" price offer to finalise the deal. The contract is potentially worth as much as 5 billion euros ($7.2 billion), and much more if the initial order is expanded.

"This is not a simple commercial deal... We want to think together, create together, build together and, if possible, sell together," Brazil's president Luiz Inacio Lula da Silva said during a joint press conference with visiting French president Nicolas Sarkozy.

On a two-day visit to Brazil, Sarkozy said France plans to buy 10 military transport planes from Empresa Brasileira Aeronautica SA (Embraer).

The deals are part of a broader strategic defence alliance both countries signed last year. It also involves a separate 6.7 billion euros ($9.4 billion) deal for the construction of conventional and nuclear powered submarines, which has already been inked. A separate deal 1.9 billion euros ($2.6 billion) for the supply of 50 EC-725 Cougar military transport helicopters has also been agreed upon.

The contracts involve significant transfers of technology, a priority for Brazil, which is intent upon developing an advanced defence industry of its own.

Brazil has said it will develop and build the nuclear engine of the atomic-powered submarine along with Argentina, without French aid. The rest of the vessel, however, will rely on French technology. The Scorpene conventional submarines will be built in France.