May 30, 2018 / 12:59 PM / 25 days ago

Sweden set to close $1 billion Patriot missile deal

STOCKHOLM (Reuters) - Sweden will close a deal in the next few weeks with U.S. arms maker Raytheon Co (RTN.N) to buy the Patriot air defense missile system as it modernizes its armed forces amid heightened tensions with Russia.

FILE PHOTO: Logo of the U.S. defense company Raytheon is pictured at an international military fair in Kielce, Poland September 7, 2017. REUTERS/Kacper Pempel

Moscow’s brief war with Georgia in 2008 and its annexation of the Crimea Peninsula six years later has pushed Sweden, not a NATO member but with close ties to the alliance, to rebuild its armed forces after decades of neglect.

“We are now done negotiating with the U.S. about Patriot and will now ask the government’s permission to sign the contract,” said Joakim Lewin, head of the Army Design Office at the Swedish Materiel Administration (FMV), which procures and maintains equipment for the military.

The deal is initially worth around 10 billion crowns ($1.13 billion) and is the biggest military purchase since 2013 when Sweden started to upgrade 60 Saab SAAB.ST Gripen fighters, a deal worth around 47 billion crowns.

Sweden’s current air defense system, which is over a decade old, cannot shoot down enemy ballistic robots.

According to Lewin, the Patriot deal includes four firing units, parts, training and an undisclosed number of missiles.

The contract also includes an option to expand the purchase to up to 300 missiles. If the option is used, the final bill will be around $3 billion, Lewin said.

Delivery is expected to start in 2021.

So far, 15 other countries have purchased the Patriots, including NATO members Germany, the Netherlands, Romania and Poland. Neutral Switzerland has said it is considering Patriot among other systems.

The Swedish government has until August 10th to make a final decision on the deal.

Reporting by Johan Sennero; Editing by Simon Johnson and Mark Potter

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