UAE Scales Back $6.95 Billion Lockheed Martin Missile Defense Package
The United Arab Emirates has scaled back by about one-third its planned acquisition of Lockheed Martin Corp. (LMT) missile interceptors in what was a potential $6.95 billion package, according to the U.S. Missile Defense Agency.
The UAE last August “adjusted its requirement” to 96 Terminal High Altitude Area Defense interceptors from 144, according to an unreleased “Selected Acquisition Report” submitted to Congress in April. Bloomberg News obtained the document, which disclosed the reduction.
The UAE also reduced its purchase -- from four to two -- of the AN/TPY-2 mobile search and tracking radar made by Raytheon Co. (RTN) The new radar plan supports two missile batteries, rather than three, the MDA said.
The UAE is seeking to be the first Thaad international buyer. In September 2008, when the deal was first proposed for congressional approval, the Pentagon said it would be worth as much as $6.95 billion if all options were exercised. The UAE is also buying the Lockheed Martin-Raytheon Patriot Pac-3 missile for low-level air defense.
The Thaad missile is also a centerpiece of the regional missile defense that the Obama administration plans to deploy in the Middle East against Iran’s medium- and long-range ballistic missiles. Batteries of land-based interceptors would be linked to the U.S. Navy radar and control systems on Aegis-class destroyers and cruisers.
Talks ‘Constructive’
UAE spokesman Bader Bin Saeed, in an e-mail statement, said his government had no comment. A spokesman for Bethesda, Maryland-based Lockheed Martin, Jeff Adams, said in an e-mail that negotiations are ongoing. “We cannot comment on specifics at this time,” he said.
In a May 24 interview Lockheed CEO Robert Stevens said discussions with the UAE “are ongoing and constructive. The level of interest is high and the system has demonstrated its efficacy.” He declined to say when the discussions will conclude in a sale.
Stevens said at a June 2 investors conference that the UAE has “very much reinforced the desire to acquire” the Thaad interceptors in a sale he called “a very substantial, more than $1 billion class order.”
He said that “the timing will probably unfold in two pieces: an advanced procurement or long-lead procurement phase, maybe at the end of this year; and maybe by about the middle of next year, the balance of that order.”
More Competition
Lockheed is also competing in the UAE for a battle management, command and control system called the Extended Air Defense Ground Environment-Tactical, Patrick Dewar, the company’s senior vice president for strategy and business development, said in an interview at the Paris Air Show.
The system, valued at about $1 billion, would integrate UAE’s Patriot anti-missile batteries with the Thaad systems, Dewar said. Lockheed is competing against ThalesRaytheon Systems, a joint venture of Thales Group of Neuilly-sur-Seine, France and Waltham, Massachusetts-based Raytheon, Dewar said.
The contract for the system may be awarded “this summer,” Dewar said.
To contact the reporter on this story: Tony Capaccio in Washington at acapaccio@bloomberg.net
To contact the editor responsible for this story: Mark Silva at msilva34@bloomberg.net
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