AgustaWestland and Embraer say they have terminated plans for a helicopter production joint venture in Brazil.

On April 22, the two companies said: “Following the press release jointly issued on 21st January 2013 related to the memorandum of understanding signed by Embraer S.A. and AgustaWestland, the two companies announce today their joint decision to terminate negotiations without reaching an agreement for the establishment of a Joint Venture in Brazil.”

The companies did not say why the deal was halted.

Company officials from both firms had been working on the idea for several months before it came to light in January. AgustaWestland was hoping to use the joint venture to gain access to Brazil’s burgeoning oil and gas market for helicopters. With Embraer as a partner, the helicopter manufacturer was hoping to offer the AW139 and AW189 medium and super-medium helicopters to operators in the region. State-owned oil company Petrobras controls much of the country’s oil production and has previously said that it prefers contractors to use Brazilian content in its offering, be that pilots or aircraft.

The two companies had also hoped to capture some of the parapublic market share away from Eurocopter and its subsidiary Helibras, as agencies look for new helicopters in preparation for the upcoming 2014 World Cup and 2016 Summer Olympic Games.

The agreement’s termination will no doubt come as bad news for the Anglo-Italian manufacturer, which continues to be embroiled in allegations of corruption over a deal for VIP helicopters in India. Investigations into the 2010 deal by both Indian and Italian authorities are continuing.

Read our original story on this discussion: Embraer, AgustaWestland Mull Joint Venture