The government of Qatar and British weapons maker BAE Systems PLC have finalized a multibillion deal for 24 combat jets, continuing a weapons buying spree by the Middle East country.
BAE Systems on Sunday said the two sides have entered a roughly GBP5 billion ($6.7 billion) contract for the Eurofighter Typhoon combat jets, training and related items. Qatar and the British government this summer first disclosed the potential deal over the sale of two-dozen of the combat planes.
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The deal comes days after Qatar announced it was buying 12 more Rafale combat jets from France's Dassault Aviation SA. The agreement was announced during a visit by French President Emmanuel Macron to Qatar. The Persian Gulf state previously bought 24 Rafale planes.
The tiny but gas-rich Gulf state earlier this year also signed a deal to buy 72 F-15 combat aircraft from Boeing Co. in a transaction valued at $12 billion.
Qatar's weapons purchases come amid a monthslong regional diplomatic spat between the Persian Gulf state and some of its neighbors. Saudi Arabia, the United Arab Emirates, Bahrain and Egypt broke off diplomatic relations with Qatar in June, accusing their neighbor of supporting terrorism and meddling in their internal affairs, charges Doha denies. The diplomatic standoff in the Gulf pits several U.S. partners against one another.
For BAE Systems, the deal comes at an important time. The London-based company in October said it would eliminate almost 2,000 jobs and slow production of Typhoon combat jets amid a dearth of orders. The deal is still subject to financing conditions and first payments, BAE Systems said. It expected those to be in hand by mid-2018.
The decision to slow the pace of production of Typhoon planes, which BAE makes in conjunction with Airbus SE and Italy's Leonardo SpA, stretched the current production activity until 2022 from a threatened stop in 2019. BAE said Qatar should start to receive its planes starting in late 2022.
BAE also this year said it was selling 6 Hawk trainer planes to Qatar.
The Middle East has been one of the rare bright spots for exports of the Typhoon, which has struggled to win orders in other regions. Saudi Arabia has acquired 72 of the planes and may take more. Oman and Kuwait also are customers for the twin-engine combat plane.
Regional tension with Iran and the fight against Islamic State have bolstered Middle East demand for the newest defense equipment despite financial pressures on government budgets from a slump in oil prices since the middle of 2014. Saudi Arabia in May announced $110 billion in arms deals with the U.S., though several of those agreements had been previously disclosed.
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(END) Dow Jones Newswires
December 10, 2017 13:42 ET (18:42 GMT)