BAE and Thales dominate Saudi defence contracts for Typhoon jets and naval systems

provides for the acquisition of 72 Typhoon aircraft in a programme aimed at the modernisation of the Saudi Armed Forces, was launched in September 2007. This carries substantial packages of work and expertise transfers, aimed at developing the Saudi industrial defence sector. BAE Systems has made a major commitment to the training of local nationals to bring them into management, technical and other qualified positions. Saudis constitute 21% of BAE’s group sales, 57% of the total BAE Systems’ workforce in Saudi Arabia making the Company one of the largest private sector employers of Saudis with 5,000 employees based locally. The UK and Saudi have discussed in the past moving the final assembly of some of the 72 Typhoons in Saudi Arabia but it failed. Now, the two countries may be trying to have locally produced Hawks on the back of the 22 trainer order at the end of 2015, according to local press. Thales (10% of group sales in the Middle East, mainly in defence) has an established presence in the Kingdom of Saudi Arabia, with 750 employees and a diversified portfolio of activities. The company has built a mature relationship with Saudi Arabia based on solid, country-wide partnerships. Thales’s major commercial successes include the Shahine and Crotale air defence contracts with logistic support. In naval defence, Thales is the prime contractor for the Sawari II contract (three frigates), that follows on from the successful Sawari | programme (four frigates) for which Thales now provides logistic support. In 2007, Thales was selected by the Saudi Arabian Ministry of Defence to supply a major electronic protection system to the Royal Saudi Air Force. US contractors such as Lockheed Martin (supplier of F16 jets, C130) transport planes), General Dynamics (military vehicles) and Raytheon (missiles) have some local presence in Saudi Arabia, but BAE is by in large the largest and historical local presence. 76 GEMs Paper #26 | 30 June 2016 3S Merrill Lynch HOUSE_OVERSIGHT_016186