Boost for BAE as Germans finally give the green light to £5bn Saudi Typhoon jet deal

Germany has dropped its opposition to the sale of Eurofighter Typhoon jets to Saudi Arabia, which could unlock a lucrative deal for BAE Systems.

The defence giant signed a memorandum of understanding to sell the kingdom 48 of the aircraft – a cornerstone of UK defence exports which supports thousands of jobs – back in 2018 for a reported £5billion.

But the sale of the jets has been held up for years due to objections from Germany – one of four countries behind the Eurofighter Typhoon programme alongside the UK, Italy and Spain.

Berlin has vetoed the deal amid concerns about Saudi Arabia’s conduct of its war against Houthi rebels in Yemen as well as the murder of journalist Jamal Khashoggi in 2018.

However, foreign minister Annalena Baerbock said during a trip to Israel: ‘We do not see the German government opposing British considerations for more Eurofighters for Saudi Arabia.’

Take-off: BAE Systems looks set to benefit now that the Germans have dropped their veto on a deal to sell 48 Typhoon jets to Saudi Arabia

She pointed to the fact that the Saudis were helping to contain the Middle East conflict by shooting down Houthi missiles aimed at Israel.

And yesterday, a spokesman for chancellor Olaf Scholz said the German leader chancellor ‘shares this assessment’.

Downing Street welcomed the move last night.

A spokesman for Prime Minister Rishi Sunak said: ‘The Eurofighter programme supports tens of thousands of jobs across all four nations and strengthens our collective security.’

The PM is reported to have been pushing Scholz to unblock the sale. The spokesman said he ‘wouldn’t get into private discussions between leaders’.

The move could open up fissures in Germany’s coalition government, with opposition among members of Baerbock’s own Green party. 

But it comes at a time when Houthi attacks on the global shipping route through the Red Sea are causing growing problems for the global economy. 

Major operators are diverting freighters via the southern tip of Africa to avoid the attacks, lengthening delivery times for oil and goods to consumers and businesses in Europe.

The Typhoon deal could provide a boost to BAE, which has been seeing demand grow thanks to the war in Ukraine as well as rising tensions in the Middle East and Taiwan.

Analyst George Zhao at asset manager Bernstein said: ‘The Eurofighter deal would be a positive if this actually goes through. 

These things are never certain until the final approval though, so let’s see how this progresses.’

A BAE spokeman said: ‘We continue to address current and potential new requirements as part of long standing agreements between the Government and Saudi Arabia.’

Britain has sold billions of pounds worth of Typhoons to the likes of Kuwait, Qatar, Oman and Germany. Saudi Arabia already has 72 of the aircraft. 

BAE says it employs 5,000 workers directly on the programme at its sites in Lancashire and that it supports more than 20,000 jobs across the UK economy as a whole.

BAE shares rose by 30 per cent last year and has nearly doubled since Vladimir Putin’s tanks rolled into Ukraine in February 2022. They fell 0.7 per cent yesterday.

This post first appeared on Dailymail.co.uk