Raytheon to sell up to $4 billion in arms to Saudi

Sunday, October 31st, 2010 | Finance News

RIYADH (Reuters) – U.S. firm Raytheon (RTN.N) plans to deliver arms worth $4 billion to Saudi Arabia, while eyeing more contracts with the kingdom and neighboring states Kuwait, Qatar and the United Arab Emirates, a senior executive said.

The United States said last month Saudi Arabia wants to spend as much as $60 billion on aircraft, helicopters and other arms, kicking off a spending spree in the Gulf anticipating an escalation of the West's row with Iran over its nuclear plans.

Raytheon, which makes missiles and radar systems, said its share in the Saudi deal was worth up to $4 billion, while the defense firm is chasing other contracts in the top oil exporter.

"We have other projects with Saudi Arabia," said Thomas Culligan, executive vice president of business development and chief executive of Raytheon International.

He cited talks with the kingdom over an upgrade of Patriot missiles -- famous for shooting down Scud missiles launched by Saddam Hussein's Iraq on Saudi Arabia and Israel in the 1991 Gulf war.

Diplomats expect smaller Arab states in the world's top oil producing region to follow with arms orders as they worry they might become targets for strikes. Kuwait was also interested in an upgrade of Patriots, while talks were also going on with Qatar, Culligan told reporters late on Saturday, declining to provide a price tag.

Raytheon said it was in talks for another arms deal in the United Arab Emirates.

The firm was also hoping to sign homeland security and cyber security deals with Saudi Arabia, he added. "We're working on proposals," he said.

Culligan said Raytheon's deal could help add several thousand jobs in the United States.

But he cautioned the overall Saudi arms package was expected to be worth $25 billion rather than $60 billion.

"I don't know where the $60 billion comes from. If you maybe add 25 years of maintenance contracts," he said.

"I think it is much less."

(Reporting by Ulf Laessing; Editing by Michael Shields)

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