BAE share price: Kuwait to buy 28 Typhoons for €8bn

on Sep 14, 2015
Updated: Jun 1, 2022

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BAE Systems Plc (LON:BA) can breathe a sigh of relief after it was reported on Friday that Kuwait has signed a memorandum of understanding to buy up to 28 Eurofighter Typhoons.

If finalised, the deal will bring in as much as €8 billion (£5.9 billion) to the Eurofighter consortium, which consists primarily of BAE, Italy’s Finmeccanica and Airbus.
“We are delighted to welcome Kuwait as the newest member of our Eurofighter Typhoon family,” Alberto Gutierrez, chief executive of the Eurofighter consortium, said on Friday. “This new agreement is the confirmation of the superiority of the Eurofighter over its competitors and will provide a great opportunity for further Eurofighter orders.”

The announcement was welcomed by investors, with BAE’s share price surging some two percent on Friday against a drop for the FTSE 100.
“Although this is only a memorandum of understanding and negotiations have yet to be finished, this is a credit to the Typhoon and its sales campaign,” Howard Wheeldon, an indepedent defence analyst, said as quoted by The Telegraph.
“In terms of producing the aircraft the order comes at a great time for BAE but this could be just the start of it. Talks are going on to sell more of the jets to Saudi Arabia and Bahrain, and possibly Malaysia.”
In recent years, the Eurofighter programme has struggled against low-cost competitors such as France’s Rafale. Earlier this year, BAE flagged the possibility of paring its Eurofighter production capacity in order to maintain lines running through the end of the decade.
Although an €8 billion order from Kuwait would do much to alleviate concerns, analyst also noted that more orders would be needed for the programme to stay afloat in the long term.
BAE’s share price had climbed 0.31 percent to 453.10p as of 13:27 BST today, outperforming the FTSE 100 which had shed some 0.2 percent.
As of 13:51 BST, Monday, 14 September, BAE Systems plc share price is 452.85p.
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