The deal was announced in a statement issued by Presidents Luis Inacio Silva da Lula of Brazil and Nicolas Sarkozy of France, who together took part in Brazil's Independence Day ceremonies in Brasilia. The precise value of the aircraft sale was not released, pending final agreement on the terms, but observers estimate its value to be more than $2 billon. The French aircraft manufacturer Dassault beat out Boeing and the Swedish aircraft company Saab Gripen in the closely watched bidding for one of larger defense plums in recent years. A decisive factor was France's willingness to transfer technology to the Brazilians in the course of supplying it with Rafale fighter jets. Saab and Boeing, maker of F-18 Super Hornets, were reluctant to transfer technology, Lula indicated in a remarks last week in which he expressed a preference for the French planes. Brazilian Defense Minister Nelson Jobim said in April that such transfers would be a prerequisite of any major arms deals Brazil signs. The agreement follows a long-term pact signed in December and valued at $11 billion, under which Brazil and France will jointly build five submarines, one of them nuclear-powered. The vessels will be built at a new shipyard in Itaguai, an industrial zone near Rio de Janeiro that includes three new steel factories. In addition, France is selling Brazil 50 military helicopters that will be assembled at a factory to be built in Minas Gerais state. In a defense plan unveiled last year, Brazil detailed what it saw as the need to militarily protect its growing reserves of offshore oil as well as natural resources in the Amazon basin. On Monday, Lula said that the French fighters would help Brazil defend its borders. 'We're going to produce equipment that reinforces our technological capacity to protect our natural riches,' Lula said. 'Brazil is counting on a regional defense plan to integrate its development.' Over the last two years Brazil has announced the discovery of huge offshore oil reserves called Pre Salt in ultra-deep waters of the Atlantic that could make it a major global exporter and, according to Lula, finance its ascension to First World status. The nation also has immense natural resources -- including timber, gold and uranium -- in its Amazon region that reportedly are being exploited illegally by groups said to include the Revolutionary Armed Forces of Colombia, a leftist guerrilla group. Brazil is not the only major country in the northern reaches of South America that is arming up. Venezuelan President Hugo Chavez has also been on an arms spending spree, buying aircraft, tanks and AK-47 assault weapons from Russia worth more than $3 billion. And the U.S. has given in excess of $4 billion in military aid to Colombia since 2000. Despite the apparent loss of the Brazilian aircraft deal, U.S. arms manufacturers still lead the world by a large margin. In a report issued over the weekend, the Congressional Research Service, a nonpartisan branch of the Library of Congress, said that while global arms sales worldwide fell 7.6 percent in 2008 to $55.2 billion, the United States increased its share to $37.8 billion, or 69 percent of all sales. Italy was a distant second with $3.7 billion in sales. 