Saab Surges on Optimism Switzerland Will Opt to Buy Gripen Jet
Saab AB (SAABB) surged the most since February in Stockholm trading on a report that Switzerland plans to buy 22 Gripen fighter jets for about 3 billion Swiss francs ($3.29 billion).
Saab gained as much as 8.9 kronor, or 8.2 percent, to 117.5 kronor in Stockholm, the most since Feb. 16. The stock reversed an earlier loss and traded at 117.1 kronor as of 2:35 p.m.
Switzerland has decided against buying the Dassault Aviation SA (AM)’s Rafale or Eurofighter jets, Tages-Anzeiger reported, citing unidentified people close to the government. Spokespeople for Saab and Dassault said they have not been informed of any decision. A Eurofighter spokesman did not immediately return calls seeking comment.
The country is awarding a contract to replace its fleet of ageing Northrop F-5 Tigers. The Swedish defense manufacturer has won export orders to South Africa and Thailand and also is competing with Eurofighter in India. The Swedish aircraft made its first flight in 1988 and entered service in 1993. The first export contract for the 1,320 mile-per-hour aircraft was signed by South Africa in 1999.
Saab is competing against Boeing Co. (BA)’s F/A-18 Super Hornet and the Rafale jet for orders in Brazil, and the company is also pursuing order from Croatia and Bulgaria. The Gripen was eliminated in April from the six-way contest to replace India’s aging fleet of MiG-21s, along with the F/A-18 Super Hornet and Lockheed Martin Corp. (LMT)’s F-16.
The Gripen has struggled to win export business in recent years. Norway dealt Saab a blow in 2008 with a contract for 48 Lockheed Martin Joint Strike Fighters after analysts predicted the Gripen would win. Work on Gripens for South Africa and Thailand runs out in 2012.
For Dassault, losing out in Switzerland further dims the export prospects for its Rafale combat jet, which so far has failed to win a single buyer beyond the French government. Eurofighter has also scaled back output of its aircraft as demand drops.
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