Saudi signs $11bn deal to buy 72 Typhoon jets
Posted: Friday, August 18, 2006
Riyadh
Saudi Arabia and Britain signed an agreement on Thursday for the Gulf kingdomÂ’s purchase of 72 Eurofighter Typhoon aircraft in a deal analysts have said could be worth more than 6 billion pounds ($11.4 billion).
A Saudi Defence Ministry statement, carried by the official SPA news agency, said 'the agreement was signed ... for the purchase of 72 Typhoon aircraft.'
The brief statement, which did not give the value of the deal, said it also included a defence technology transfer.
Sources close to the negotiations had said a deal signed in December was believed to have an option of up to 72 aircraft.
The purchase is being carried out to replace British-made Tornados and other jets with the Typhoons.
The multinational Eurofighter consortium that makes Typhoon jets includes British defence contractor BAE Systems, European aerospace group EADS and Italy's Finmeccanica.
BAE is expected to invest in local training for thousands of Saudi nationals. Saudi Arabia has a long history of buying arms from Britain dating back to the 1960s, and usually pays in oil.
Meanwhile, a Financial Times report said the deal could be worth 10 billion pounds ($18.8 billion) 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.
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.
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