BAE Systems - Growing

21/12/2005 15:57 BAE Systems says UK, Saudi Arabia sign agreement on closer defence ties UPDATE

LONDON (AFX) - The UK Ministry of Defence has confirmed that BAE Systems
PLC is to benefit as prime contractor after the Governments of the Kingdom of
Saudi Arabia and the UK signed an 'Understanding Document', which is intended to
establish a greater partnership in modernising the Saudi Arabian Armed Forces
and developing close service-to-service contacts especially through joint
training and exercises.
Earlier, shares in BAE climbed higher amid reports that the group was set to
agree a valuable jet contract with Saudi Arabia.
In a statement this afternoon, the UK MoD said that, as prime contractor,
BAE will invest in local Saudi companies, develop an industrial technology
transfer plan, and provide suitable training for thousands of Saudi nationals.
Under the document, Typhoon aircraft will replace Tornado Air Defence
Variant aircraft and others currently in service with the RSAF.
The details of these arrangements are confidential between the two
governments.
Defence Secretary Dr John Reid said: "This Understanding is good news for
both UK and Saudi industry. BAE SYSTEMS, as prime contractor, and its many UK
sub-contractors will benefit from the work envisaged under this Understanding,
which will help sustain several thousand UK jobs over the next ten years."
In addition, the associated technology transfer, training and inward
investment packages will generate many skilled jobs in Saudi Arabia, he added.
(recasts, adds detail from MoD statement)