Following President Donald Trump’s visit to Saudi Arabia over the weekend, a deal was announced between President Trump and King Salman of Saudi Arabia as part of a Joint Strategic Vision Statement promising close collaboration to counter violent extremism, disrupt the financing of terrorism, and advance defense cooperation. Secretary of State Rex Tillerson was also present as President Trump and King Salman participated in the signing ceremony of the deal worth almost $110 billion in defense capabilities.
On Saturday, aerospace and defense company Lockheed Martin (LMT 278.29, +5.50 +2.02%) announced a deal with the Kingdom of Saudi Arabia which has expressed its intent to procure more than $28 billion worth of LMT integrated air and missile defense, combat ship, tactical aircraft and rotary wing technologies and programs.
The deal includes:
- Letters of Offer and Acceptance and a Memorandum of Intent covering government-to-government sales of Lockheed Martin programs to include integrated error and missile defense systems, multi-mission surface combatant ships, radar systems, surveillance systems, tactical aircraft and rotary wing programs.
- A Letter of Intent, between Lockheed Martin and Taqnia, to form a joint venture to support final assembly and completion of an estimated 150 S-70 Black Hawk utility helicopters for the Saudi government. The program supports work for more than 450 U.S. jobs including in Connecticut at Sikorsky and throughout the U. S. supply chain and also supports KSA's Vision 2030 by creating an additional 450 jobs in the Kingdom, developing local capabilities through technology and skills transfer, thus enhancing the U.S.-Saudi global security partnership.
- A Memorandum of Understanding between Lockheed Martin and Saudi Arabian Military Industries for the parties to work together to build defense capabilities in the KSA to support Vision 2030 and provide for localization efforts associated with Multi-mission Surface Combatants and Aerostats.
Once fully realized, the programs in this announcement will support more than 18,000 highly skilled jobs in the U.S. and thousands of jobs in Saudi Arabia as part of maintaining and modernizing these platforms over the next 30 years. These programs help the Saudi government realize its Vision 2030 objective of building its domestic technology capabilities and skilled workforce.
The weekend news lifts defense names in Monday trading with LMT peers higher into midday BA +1.36%, RTN +0.51%, UTX +0.35%, NOC +0.32%.