UPDATE 1-Embraer, Finmeccanica unit call off Brazil chopper deal

Fri Apr 19, 2013 7:12pm EDT

* Another hit for AgustaWestland after India bribe scandal

* Companies give no reason for ending JV negotiations

SAO PAULO, April 19 (Reuters) - Brazilian planemaker Embraer SA and a unit of Italy's Finmeccanica SpA said on Friday they had ended talks to make helicopters in Brazil without reaching a deal.

The failed talks represent another setback for Finmeccanica's AgustaWestland in a major emerging market as it awaits a possible blacklisting in India due to corruption charges.

AgustaWestland faces allegations in Italy and India that it paid bribes to win a $750 million deal to supply a dozen helicopters to transport Indian political leaders.

Spokesmen for the companies declined to give reasons for calling off the negotiations to start a potential joint venture, first announced in January.

For Embraer, the possibility of producing helicopters in Brazil for military and commercial uses offered another potential revenue stream as demand in its traditional business of regional and executive jets has stagnated in recent years.

Preliminary studies by AgustaWestland and Embraer had shown a promising market for midsize twin engine helicopters to service a growing number of remote oil rigs off the Brazilian coast. Brazil's growing defense budget and private demand in congested cities also presented opportunities.

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