Bern, Switzerland, Oct. 31, 2023 – United States and Switzerland officials formalized an agreement for Switzerland to purchase Lockheed Martin’s (NYSE: LMT) Patriot Advanced Capability-3 (PAC-3) Missile Segment Enhancement (MSE) missiles and related support equipment. With this agreement, Switzerland becomes PAC-3’s 15th partner nation.
PAC-3 MSE will bolster Switzerland’s Patriot ground-based air defense system as a part of the Switzerland Air Force’s Air2030 program.
Lockheed Martin and armasuisse also finalized the Offset Agreement supporting the PAC-3 MSE program. This agreement is the catalyst for multiple new projects that will support Switzerland’s security-relevant technology and industry base (STIB).
The PAC-3 MSE expands the battlespace with a dual-pulse solid rocket motor, providing increased performance in altitude and range. PAC-3 MSE is a high-velocity interceptor that defends against incoming threats, including tactical ballistic missiles, cruise missiles, advanced threats and aircraft. The PAC-3 MSE missile uses Hit-to-Kill technology, intercepting threats through kinetic energy via body-to-body contact.
Forward-Looking Statements
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including expected delivery dates. Such statements are based on current expectations and projections about our future results, prospects and opportunities and are not guarantees of future performance. Such statements will not be updated unless required by law. Actual results and performance may differ materially from those expressed or forecasted in forward-looking statements due to a number of factors, including those discussed in our filings with the Securities and Exchange Commission.
Lockheed Martin successfully delivered Sweden’s first Patriot Advanced Capability-3 (PAC-3) Missile Segment Enhancement (MSE) interceptors in April, providing the country with the world’s most advanced air defense missile that uses Hit-to-Kill technology to defend against incoming threats.
U.S. and Swedish officials formalized an agreement for Sweden to purchase PAC-3 MSE interceptors and related support equipment in August 2018.
The PAC-3 MSE’s revolutionary two-pulse solid rocket motor provides increased performance in both altitude and range while employing the same proven Hit-to-Kill technology that the PAC-3 CRI missile uniquely brings to the Patriot system.
(Bloomberg) — Qatar has made agreements with U.S. companies to spend billions on airplanes and jet engines and to develop a petrochemical complex, the White House said on Tuesday.
At least some of the deals were previously made but were publicly touted by the Trump administration Tuesday. Among them: Qatar Airways purchasing Boeing Co. 777 freighters and large-cabin aircraft from Gulfstream Aerospace, the private jet unit of General Dynamics Corp.
“They’re investing very heavily in our country,” Trump told reporters at the White House. “They’re creating a lot of jobs. They’re buying tremendous amounts of military equipment including planes.
Qatar’s defense ministry committed to acquire Raytheon Co.’s NASM and Patriot Systems, according to the White House. In addition, a unit of Chevron Corp. entered into an agreement with Qatar Petroleum for the development, construction and operation of a petrochemicals complex in Qatar.
The agreements, whose total cost wasn’t disclosed by the White House, were announced during a visit to the White House by the emir of Qatar, Sheikh Tamim Bin Hamad Al Thani.
The deals come amid a two-year economic blockade of Qatar led by U.S. ally Saudi Arabia and supported by nations including Egypt and the United Arab Emirates. Trump initially appeared to support the Saudi move — echoing its assertions that Qatar supported terrorists — even though it put the U.S. in an awkward position because it has a major military base in Qatar.
But Qatar has looked to improve relations in the U.S., with the emir saying the country was committed to doubling the economic partnership between the two countries. Mansoor bin Ebrahim Al Mahmoud, who leads the Qatar Investment Authority, said earlier this year that the country’s sovereign wealth fund will look to increase its U.S. investment portfolio from around $30 billion to about $45 billion over the next two years.
The country has also made significant gestures toward increasing its spending on U.S. defense contractors, with the U.S. approving a large weapons systems purchase ahead of Sheikh Tamim’s last visit to the country. In 2017, the country signed a deal to spend $12 billion for the purchase of 36 F-15QA fighter jets.
And the U.S. has announced plans to expand and renovate the al-Udeid Air Base near Doha, which houses the forward headquarters of the U.S. military’s Central Command and some 10,000 American troops. During a dinner with the leaders on Monday, Trump thanked Sheikh Tamim for Qatar’s $1.8 billion investment in the project which will be used to construct housing and entertainment facilities.
Several companies have released specifics of some of the agreements that were formalized on Tuesday.
Gulfstream said its deal is for $1 billion in corporate jets that General Dynamics announced in January without giving the customer’s name. Boeing said last month it made a deal to sell five 777 freighters at a list price of $1.8 billion.
Qatar Airways plans to use General Electric Co. jet engines for Boeing 787 and 777 aircraft, according to the White House.
A Chevron statement Tuesday said the company was signing a new agreement at the White House for a previously unannounced $8 billion U.S. Gulf Coast project. The White House statement mentions only a prior deal, announced last month, in which the company would join forces with Qatar Petroleum to build a facility in Qatar.
(Story by Justin Sink and Thomas Black, Edited by Alex Wayne, Justin Blum, and Larry Liebert)
53rd International Paris Air Show at Le Bourget Airport
PARIS (Reuters) – U.S. arms makers say European demand for fighter jets, missile defenses and other weapons is growing fast amid heightened concerns about Russia and Iran.
The U.S. government sent a group of unusually high-ranking officials including Commerce Secretary Wilbur Ross to the Paris Airshow this year, where nearly 400 U.S. companies were showcasing equipment as the United States and Iran neared open confrontation in the Persian Gulf.
Lockheed Martin, Boeing and other top weapons makers said they had seen accelerating demand for U.S. weapons at the biennial air show despite escalating trade tensions between the United States and Europe.
“Two Paris air shows ago, there weren’t a lot of orders,” said Rick Edwards, who heads Lockheed’s international division. “Now … our fastest growth market for Lockheed Martin in the world is Europe.”
Many European nations have increased military spending since Russia’s annexation of the Crimea region of Ukraine in 2014, bolstering missile defenses and upgrading or replacing ageing fighter jet fleets. NATO members agreed in 2014 to move toward spending 2% of gross domestic product on defence.
Eric Fanning, chief executive of the Aerospace Industries Association, said the NATO pledge and European concerns about Russia were fueling demand. “I do think it reflects the increasing provocations of Russia,” he said.
Industry executives and government officials say growing concern about Iran’s missile development program is another key factor. Tehran’s downing of a U.S. drone came late in the air show, but executives said it would support further demand.
“Iran is our best business development partner. Every time they do something like this, it heightens awareness of the threat,” said one senior defence industry executive, who asked not to be named.
Edwards said Lockheed’s F-35 stealth fighter, selected by Belgium, is poised to win another new order from Poland, while Bulgaria, Slovakia and Romania are also working to replace Soviet-era equipment.
Edwards and other executives say they see no impact from the ongoing trade disputes between U.S. President Donald Trump and the European Union.
U.S. Army Lieutenant General Charles Hooper, director of the Pentagon’s Defense Security Cooperation Agency (DSCA), said Europe accounted for nearly a quarter of the $55.7 billion in foreign arms sales his agency handled in fiscal 2018.
Hooper said the U.S. government was making concerted efforts to speed arms sales approvals and boost sales to help arm allies with U.S. weapons.
Ralph Acaba, president of Raytheon Co’s’s Integrated Defense Systems business, said the company was boosting automation and working to deliver the Patriot missile system and other weapons in half the five-year period previously typical.
“Europe is really big for us now, and that’s a big change in just the last few years and even the last 18 months,” he said.
In addition to wooing new Patriot customers, Raytheon is upgrading existing systems for customers like Germany, which is likely to finalize a contract worth potentially hundreds of millions of dollars to the company in coming months.
Thomas Breckenridge, head of international sales for Boeing’s strike, surveillance and mobility programs, is eyeing contracts wins for Boeing’s F/A-18 Super Hornet fighter jets in Germany, Switzerland and Finland.
“There’s a huge appetite in Europe for defence as a whole,” he said.
(Reporting by Andrea Shalal; Editing by Jan Harvey)
United Technologies, Raytheon to create $120 billion aerospace and defence giant
(Reuters) – United Technologies Corp agreed on Sunday to combine its aerospace business with U.S. contractor Raytheon Co and create a new company worth about $121 billion, in what would be the sector’s biggest ever merger.
The deal would reshape the competitive landscape by forming a conglomerate which spans commercial aviation and defense procurement. United Technologies provides primarily commercial plane makers with electronics, communications and other equipment, whereas Raytheon mainly supplies the U.S. government with military aircraft and missile equipment.
While United Technologies and Raytheon have some common customers, their business overlap is limited, an argument the companies plan to make once U.S. antitrust regulators start scrutinizing the merger.
However, the two major commercial aircraft makers, Boeing Co and Airbus SE, as well as the Pentagon, have been known to use their significant purchasing power to seek concessions from their suppliers and may not welcome a potential lessening in competition among them.
When United Technologies rebuffed an acquisition offer from Honeywell International Inc in 2016, United Technologies chief executive Greg Hayes justified the decision partly by predicting that Boeing and Airbus would never accept having a supplier that would “build the plane from tip to tail.”
United Technologies has said it is on track to separate its Carrier air conditioning and Otis elevator businesses, leaving the company focused on its aerospace business through its $23 billion acquisition of Rockwell Collins, which was completed in 2018, and the Pratt & Whitney engines business.
Chinese authorities scrutinized the acquisition of airplane parts maker Rockwell Collins closely, given the companies’ footprint in that country’s market. This resulted in the deal closing in November 2018, as opposed to the targeted third quarter.
Trade tensions between the United States and China were blamed at least partly by analysts for that delay, but a source close to the deal said the companies did not expect this to be repeated because Raytheon does not do business in China.
Under the deal announced on Sunday, Raytheon shareholders will receive 2.3348 shares in the combined company for each Raytheon share. The merger is expected to result in more than $1 billion in cost synergies by the end of the fourth year, the companies said.
United Technologies shareholders will own about 57% of the combined business, called Raytheon Technologies Corporation, which will be led by Hayes. Raytheon shareholders will own the remaining stake, and Raytheon CEO Tom Kennedy will be named executive chairman. The companies negotiated the terms over several months, according to the source, who requested anonymity discussing the confidential deliberations.
The deal has been structured so that no shareholder of either company will receive a premium. United Technologies and Raytheon have market capitalizations of $114 billion and $52 billion, respectively.
The deal is expected to close in the first half of 2020.
The newly created company is expected to return between $18 billion and $20 billion of capital to shareholders in the first three years after the deal’s completion, the companies said. The new company will also assume about $26 billion in net debt, they added.
DEFENSE SPENDING RISE
Raytheon, maker of the Tomahawk and the Patriot missile systems, and other U.S. military contractors are expected to benefit from strong global demand for fighter jets and munitions as well as higher U.S. defense spending in fiscal 2020, much of it driven by U.S. President Donald Trump’s administration.
However, Pentagon spending is projected to slow down after an initial boost under Trump. A deal with United Technologies would allow Raytheon to expand into commercial aviation.
Conversely, United Technologies could benefit from reducing its exposure to commercial aerospace clients amid concerns that the rise of international trade protectionism will suppress economic growth and weigh on the flow of goods through air traffic.
The International Air Transport Association, which represents about 290 carriers accounting for more than 80% of global air traffic, cited these concerns earlier this month, when it said the industry is expected to post a $28 billion profit in 2019, down from a December forecast of $35.5 billion.
The deal with Raytheon could put pressure on General Electric Co, which competes with United Technologies for commercial aerospace clients, to seek scale. It could also push other defense contractors, such as Lockheed Martin Corp, to explore expanding their commercial businesses.
Last year, military communication equipment providers Harris Corp and L3 Technologies Inc announced an all-stock merger that, once completed, will create the sixth-largest U.S. defence contractor.
Morgan Stanley, Evercore Inc and Goldman Sachs Group Inc were financial advisers to United Technologies, while Wachtell, Lipton, Rosen & Katz was its legal adviser. Citigroup Inc was financial adviser to Raytheon, and RBC Capital Markets LLC provided a fairness opinion. Shearman & Sterling LLP was legal adviser to Raytheon.
(Reporting by Harry Brumpton and Kate Duguid in New York; Additional reporting by Mike Stone in Washington and Rama Venkat in Bengaluru; Editing by Richard Chang and Rosalba O’Brien)
ABU
DHABI, Feb 18 (Reuters) – The United Arab Emirates on Monday awarded
Raytheon Co. a 5.7 billion dirhams ($1.55 billion) contract to supply
its air force with platform systems to launch missiles, a UAE military
spokesman said.
The
agreement was signed at the week-long IDEX military exhibition in Abu
Dhabi and followed the award on Sunday of a 1.3 billion dirhams contract
to Raytheon to supply the UAE with patriot missiles.
The
UAE armed forces signed a total of 7.2 billion dirhams in contracts on
Monday, including 5.8 billion dirhams with international companies,
Brigadier General Mohammed al-Hassani said, speaking through a
translator.
The UAE has signed a total of 12 billion dirhams in contracts since the IDEX exhibition started on Sunday, he said.
Lockheed
Martin, Germany’s Diehl Defence, and Sweden’s Saab on Monday launched
at IDEX the Falcon air defence weapon system, billed as a replacement to
the Hawk system used by countries in the Middle East.
Falcon
was developed in response to a UAE request for a replacement for the
Hawk system and talks are underway to sell it to the Gulf state, Scott
Arnold, Lockheed Martin’s vice-president and deputy head of Integrated
Air and Missile Defense said.
Weapons
sales to the UAE have come under scrutiny over the past year due to the
country’s involvement in the Yemen war that has killed tens of
thousands of people and pushed the country to the brink of starvation.
The UAE and Saudi Arabia are leading a military coalition, which includes local forces drawn from Yemeni factions, that is trying to restore the internationally recognised government ousted from power in 2014 by the Iran-aligned Houthi movement.
($1 US = 3.6728 UAE dirham)
(Writing by Alexander Cornwell. Editing by Jane Merriman)
