June 18 (Bloomberg) -- Lockheed Martin Corp., Boeing Co. and Eurofighter submitted bids in a $7 billion South Korean fighter contest as U.S. and European defense contractors look to Asian markets to counter slower spending at home.
Boeing’s F-15 Silent Eagle, Lockheed’s F-35 Lightning II and the Eurofighter Typhoon will compete for the tender, South Korea’s Defense Acquisition Program Administration said in an e-mailed statement on its website. Today was the deadline for submitting bids.
The contest follows similar contracts in India and Japan as Asian nations step up defense spending amid rising wealth, compared with cuts in the U.S. and Europe. The Asia-Pacific region is expected to increase spending on defense products by 4.2 percent annually until 2016, according to Frost & Sullivan.
South Korea plans to make a decision on the 60-fighter order in October and has said it expects to spend about 8 trillion won ($7 billion) for the purchase of the new aircraft. A Presidential election scheduled for December may cause a delay, local newspaper Hankook Ilbo said on June 16, citing industry officials it didn’t name.
Lockheed, based in Bethesda, Maryland, won an order from Japan for 42 F-35 fighters in December. The jets may cost 1.6 trillion yen ($20 billion) to buy, operate and maintain over 20 years, according to the nation’s defense ministry. India picked Dassault Aviation SA for exclusive negotiations on a deal for 126 fighters in January.
South Korea ordered a total of 60 F-15s from Chicago-based Boeing in 2002 and 2007.
In the U.S., the defense budget is due to cut by about $487 billion over the next 10 years. There may be an additional $500 billion in reductions if Congress and the White House don’t agree by year-end on a plan to shrink the U.S. deficit.