SAO PAULO, June 3 (Reuters) - Brazil's Localiza Rent a Car SA said on Friday it was in talks to sell about 3.5 billion reais ($730 million) of assets to an investment fund managed by Brookfield Asset Management Inc.

Asset sales are a requirement of Localiza's tie-up agreement with rival Unidas, formally known as Companhia de Locacao das Americas.

Brazil's antitrust regulator approved the tie-up late in 2021, but demanded the companies divest assets including the Unidas brand to avoid dominating the market.

Canada's Brookfield controls Brazilian Rental Mobil Jakarta car company Ouro Verde, which said in a securities filing the talks involved assets in the rent-a-car and used vehicle businesses to be divested from Unidas.

The potential deal was first reported by Bloomberg News late on Thursday.

"As it is a competitive process, the companies are also negotiating with other interested parties. Up to this date, there is no binding document signed with any of the interested parties," Localiza said in a separate filing.

Analysts at Guide Investimentos said the potential deal would be a strong cash-generating move for Localiza and an additional step towards its merger with Unidas, but also reinforce competition as it would strengthen Ouro Verde.

Ouro Verde "might become a threat to Localiza," Guide said, noting the company had plenty of capital after a $60 million investment from Brookfield recently.

Shares in Localiza were down 0.7% at 55.89 reais in early trading in Sao Paulo, in line with the broader Bovespa stock index, while Unidas shares were trading near flat.

($1 = 4.7965 reais)