STOCKHOLM/RIO DE JANEIRO, Nov 10 (Reuters) - Sweden has

selected Embraer's ( ERJ ) C-390 Millennium as its next

military cargo aircraft, while Brazil intends to buy more Gripen

fighter jets from Swedish defense company Saab, the

European country's government said.

The letter of intent signed on Saturday comes after lengthy

talks between the countries for Brazil to increase its existing

Gripen orders and Sweden to tap the Embraer ( ERJ ) plane as replacement

for its aging fleet of Lockheed Martin's ( LMT ) C-130.

Brazil signed a contract in 2010 with Saab to buy 36 JAS 39

Gripen fighter jets. It now plans to extend the contract by 25%,

the Swedish government said.

In return, Sweden has selected Embraer's ( ERJ ) C-390 Millennium as

its new military cargo aircraft and will now start the process

of buying it.

"Sweden carried out a very in-depth analysis, evaluated

several competitors and interacted with current C-390 operators

and customers. We are very happy," Embraer's ( ERJ ) defense head Bosco

da Costa Junior told Reuters in an interview.

The Nordic country did not immediately reveal how many

C-390s it would buy or when a firm order would be placed. Costa

said Sweden had some urgency and hoped it would start adding the

aircraft "as soon as possible".

Sweden is the sixth European nation to select the Embraer ( ERJ )

aircraft, joining fellow NATO members Czech Republic, Hungary,

the Netherlands and Portugal, as well as non-NATO Austria.

Brazil and South Korea also have purchased the C-390.

The letter of intent was signed by Swedish Defense Minister

Pal Jonson and his Brazilian counterpart Jose Mucio in Natal,

Brazil, where the South American country organized a

multinational operational training exercise.

Reuters reported in 2023 that Brazil was considering buying

more Gripen fighters, and that Mucio had traveled to Sweden to

negotiate a deal that would also include the European nation

purchasing the C-390.

"It is of course very good news for Saab and Sweden. We know

that Brazil is very happy with JAS as its fighter jet. Now we

look forward to continuing discussions with Brazil about further

orders," a Saab spokesperson said, adding no contract had been

signed.

Saab and Embraer ( ERJ ) have had a joint production line for

Gripens in Brazil since last year. Swedish Radio reported on

Tuesday, citing unnamed sources, that Colombia will buy a fleet

of JAS Gripen fighter aircraft.