Boeing, Embraer to build KC-390 military cargo jet in U.S.: newspaper

RIO DE JANEIRO (Reuters) - U.S. planemaker Boeing and Brazil’s Embraer are in talks to set up an assembly line to build KC-390 military cargo jets in the United States, Brazilian newspaper Valor Economico reported on Monday.

In July, the two planemakers announced a deal to give Boeing an 80 percent stake in Embraer’s commercial aircraft arm, marking the biggest realignment in the global aerospace market in decades.

At the time, the companies also announced a deeper sales and services partnership on the new KC-390 military cargo jet through a separate defense venture that they said was likely to eventually receive a joint investment.

According to the report on Monday, which did not detail how the paper obtained the information, the two companies intend to create a defense-related joint venture to install the factory, which would be the second to produce the plane.

Such a partnership would give Boeing a newly designed, U.S.-built tactical transport plane to sell directly against rival Lockheed Martin’s workhorse Hercules C130.

The companies did not immediately respond to requests for comment. The move would allow the planemakers to grow their collaboration in the defense realm, after Boeing’s original takeover bid snagged on Brazilian concerns about it gaining control of national defense programs.

Reporting by Alexandra Alper; Editing by Susan Thomas