12:06 23 December 2012
In the wake of its failed merger with EADS, UK defense contractor BAE strikes a £2.5bn jet deal with the Sultanate of Oman. Under the deal, the UK aerospace company will provide Oman with 12 Typhoon fighter jets and eight Hawk Advanced Jet Trainer aircraft. In addition, BAE will supply aircraft and in-service support.
The deal is very important for BAE’s as America and Britain’s defence spending has considerably reduced due to ongoing economic crisis. Aside from this deal, BAE is also working on closing another one with Saudi Arabia.
Prime Minister David Cameron was happy about the deal, as it will mean additional jobs in UK. He said: "It's testament to Britain's leading aerospace industry and the deal will safeguard thousands of jobs across the UK, not just at the BAE Systems factories in Lancashire and East Riding in Yorkshire, but at many more small businesses up and down the country that play a vital role in delivering these aircraft."
On the other hand, shares in BAE fell 7.5-2.2pc- to 340.5 on Friday morning and it seems that the worst is yet to come. BAE warned earlier this week that profits might be lower than expected in 2012. BAE and Saudi Arabia failed to agree on price for Typhoon fighter jets despite the fact that the order has been placed five years ago.
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