Defense Stocks Reach Record Highs on Saudi Arms Deal

Alicia Cross
May 23, 2017

The objective of the package, according to State, is to significantly expand the more than seven-decade long security relationship between the United States and the Kingdom of Saudi Arabia, by supporting the Kingdom's defense needs and the "long-term security of Saudi Arabia and the Gulf region in the face of malign Iranian influence and Iranian related threats".

The kingdom has agreed to buy Chinook helicopters, associated support services, and guided weapon systems.

The Boeing announcement is the latest in business deals worth tens of billions of dollars signed between US and Saudi companies since Trump arrived in Riyadh on Saturday. The plans were announced by the US government in December.

- An agreement between Boeing and SaudiGulf Airlines to negotiate the sale of up to 16 widebody airplanes.

Boeing will establish as well a new joint venture with the kingdom to provide services for the sustainment of a number of military platforms, said the prepared statement, while another and separate joint venture will provide support for both commercial and military helicopters. According to reuters, the deal includes the sale of military and passenger aircraft.

Lockheed Martin said in a statement that the deal "will directly contribute to [Saudi Arabia's] Vision 2030 by opening the door for thousands of highly skilled jobs in new economic sectors".

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In addition, Boeing said that the Saudi Rotorcraft Support Company - a joint venture between Boeing, Alsalam Aerospace Industries and Saudia Aerospace Engineering Industries - recently received a commercial registration certificate.

U.S. President Donald Trump is expected to land in Israel at 12:15 PM.

- A Letter of Intent, between Lockheed Martin and Taqnia, to form a joint venture to support final assembly and completion of an estimated 150 S-70 Black Hawk utility helicopters for the Saudi government.

"Our decades-long partnership with the Kingdom began in 1945 when President Roosevelt presented a DC-3 to King Abdul Aziz Al Saud, launching commercial air travel in the region".

Defense firms shares such as General Dynamics (GD.N), Boeing (BA.N), Raytheon (RTN.N), and Lockheed Martin (LMT.N) were raised between 1% and 2.2%.

Other reports by Free-Prsite

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