Saudi Arabia And Britain Complete 10 Billion Pound Defence Deal

... just calling his stockbroker... to buy more BAE shares...

by Staff Writers
London (AFP) Aug 18, 2006
Britain has signed an agreement with Saudi Arabia to provide it with 72 Eurofighter Typhoon jets, the Financial Times reported on Friday. The deal is worth 10 billion pounds (18.8 billion dollars, 14.7 billion euros), and could more than double in value over the next 25 years if BAE Systems, Britain's biggest defence manufacturer, maintains and upgrades the jets.

According to the newspaper, Britain's Defence Secretary Des Browne and his Saudi counterpart have both signed the agreement, though both the Ministry of Defence and BAE declined to comment on the deal.

The Eurofighters themselves will cost 5.4 billion pounds, with an extra five billion pounds for on-board missiles, various other parts, and initial support.

BAE might handle the maintenance and upgrading of the fighter jets, but the newspaper reported that Saudi Arabia is keen for local companies to do the work.

The Saudi finance ministry is authorising the initial payment on the agreement, which could come as early as next week. Upon receiving the payment, BAE would have to make an announcement to the London Stock Exchange.

The agreement is also a boost for the other three countries -- Germany, Italy and Spain -- building the jets, though the Financial Times quoted Scott Babka, an aerospace analyst at investment bank Morgan Stanley, as saying BAE would be the biggest benefactor because it will be the "prime contractor".

The Times reported on Monday that the sale could be announced as early as this week.

Source: Agence France-Presse

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