LONDON (Reuters) - Britain agreed on Friday to finalise talks with Saudi Arabia on a multi-billion pound order for 48 Typhoon aircraft, the fighter plane’s maker BAE Systems (BAES.L) said.
BAE, Europe’s biggest defence contractor, has long awaited a major Saudi order for Typhoons, and slowed production in 2016 to ensure it would remain competitive.
The memorandum of intent was signed after Saudi Crown Prince Mohammed bin Salman met with British defence minister Gavin Williamson.
BAE Chief Executive Charles Woodburn said it was a positive step towards agreeing a contract with a valued partner.
“We are committed to supporting the Kingdom as it modernises the Saudi Armed Forces and develops key industrial capabilities critical to the delivery of Vision 2030,” he said, referring to Saudi Arabia’s economic and social reform programme.
The Eurofighter Typhoon is the most important combat aircraft in BAE Systems’ portfolio, accounting for nearly a third of the unit’s sales in 2016.
It is a joint project between BAE, France’s Airbus and Italy’s Leonardo, and supports an estimated 40,000 jobs in Britain.
Qatar agreed to buy 24 Typhoons in December in a contract valued at around 5 billion pounds, with delivery expected in late 2022.
The order came two months after BAE announced around 2,000 job cuts because it needed to slow Typhoon production to meet reduced demand in the short term.
Shares in BAE were trading up 2.4 percent at 603 pence after the signing of the memorandum was announced.
Reporting by Paul Sandle, Editing by Andrew MacAskill and Alexander Smith