Saudi-Arabia to buy Eurofighter Typhoons

http://www.bloomberg.com/apps/news?pid=10000085&sid=aKdd0rcMR4Dk&refer=europe

U.K. to Supply Eurofighter Jets to Saudi Arabia (Update2)

Dec. 21 (Bloomberg) — The U.K. agreed to supply Saudi Arabia with Eurofighter GmbH combat planes, the first order for the aircraft outside Europe, as part of an accord to modernize the kingdom’s armed forces. Shares of BAE Systems Plc, a Eurofighter partner, rose to a 3 1/2-year high.

Britain will replace aging Tornado jets with an unspecified number of Eurofighters and BAE, Europe’s biggest weapons maker, will transfer technology and invest in Saudi companies and train Saudi nationals, the U.K. Ministry of Defence said. Agreement terms are confidential, the ministry said.

Today’s accord “offers opportunities for forging closer links between our armed forces and industries,” U.K. Defence Secretary John Reid, who is visiting Saudi Arabia, said in an e- mailed statement from the ministry today.

BAE has provided Tornado planes, parts and air-base management to Saudi Arabia under the Al Yamamah program, the company’s biggest contract, since 1985. The London-based company owns Eurofighter jointly with European Aeronautic, Defence & Space Co. and Finmeccanica SpA.

Shares of BAE in London rose 22.25 pence, or 6.4 percent, to 370 pence, the highest since June 8, 2002. The stock is up 61 percent, valuing the company at 11.9 billion pounds ($14 billion).

Germany, the U.K., Italy and Spain are buying 620 Eurofighter planes in three batches. Munich-based Eurofighter GmbH also has an order for 18 jets from Austria, the venture’s sole export customer until now.

EADS, which is also the 80 percent owner of planemaker Airbus SAS, has its main factories in France, Germany and Spain. Finmeccanica is Italy’s biggest defense company.

The U.K. has supplied about 106 Tornado fighter jets and 33 Hawk trainers to Saudi Arabia since the mid-1980s. BAE employs 4,600 workers in the country, more than half of whom are Saudi nationals.