US airplane manufacturer Boeing is in talks to buy Brazil's Embraer.  Such a purchase would give the Chicago-based giant a stronger position to compete with Europe's Airbus.

Founded in 1916, Boeing is the largest aerospace company in the world with a market value of US$177 Billion.  It makes big commercial jetliners as well as defense, space, and security systems.  Embraer, based in the city of Sao Jose dos Campos near Sao Paulo, has a market value of US$3.7 Billion.  It's the world's number-three jet maker having carved out a niche in the market for regional jets with a seating capacity of 70 to 100 passengers.  Should the takeover happen, it would counter a recent move by Airbus to strike a similar deal with Canada's Bombardier Inc.

"The two companies are engaged in discussions regarding a potential combination, the basis of which remains under discussion," Boeing and Embraer said in a joint statement Thursday.  "There is no guarantee a transaction will result from these discussions," and, "Any transaction would be subject to the approval of the Brazilian government and regulators, the two companies" boards and Embraer's shareholders.

Neither company confirmed when the takeover talks began or how much has been agreed on.  The talks are on hold for now while they wait on the Brazilian government word from the Brazilian government on whether it would sign off on the combination.  Brasilia has a so-called "golden share" in Embraer which allows it to veto or approve any such deal.