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Brazil air force official defends Boeing-Embraer deal in Congress

SAO PAULO (Reuters) - A Brazilian air force official defended a tie-up between planemakers Embraer SA (EMBR3.SA) and Boeing Co (BA.N) from the criticism of lawmakers at a congressional hearing on Wednesday, suggesting the government's concerns about a deal have subsided.

Air Force commander Lt Brig Nivaldo Luiz Rossato said the proposed deal would "preserve national sovereignty," by keeping Brazilian defence programs out of the hands of the U.S. company, according to the congressional news service.

The companies said in April that they were discussing the creation of a new company with Embraer's airliner business, leaving out its defence unit and "potentially" its business jet division. Embraer said this week that talks were ongoing and any deal will need approval from Brazil's government and regulators.

Workers Party Congressman Carlos Zarattini called such a deal a "crime against the homeland," questioning how the government, which can veto the deal, could let Boeing take control of the crown jewel of Brazil's aerospace industry.

Rossato argued that the U.S.-Brazil partnership could actually preserve jobs at Embraer, which is wrapping up development on two major new families of aircraft and has not announced any other major investments.

Embraer shares rose nearly 4 percent on Wednesday in Sao Paulo on rising speculation that a deal could be announced soon,

having risen around 35 percent so far this year.



(Reporting by Tatiana Bautzer; Editing by Phil Berlowitz)