Arms Race: U.S. Greenlights Sale of 600 Patriot Missiles to Saudi Arabia

That could be bad for regional security, but it’s a boon for defense contractors who have already cut deals with Middle Eastern states worth roughly $6 billion in the months leading up to the historic nuclear accord.

Saudi Arabia is having a tough summer; all while Lockheed Martin has a banner year. The latest confluence of these trends came Wednesday as the U.S. State Department approved a $5.4 billion sale of 600 Lockheed-made PAC-3 missiles to Saudi Arabia, alongside an additional half billion dollars in ammunition for various smaller weapons. The deals still have to be approved by Congress, but such deals typically are.

“It marks the first major arms deal since the Iran nuclear deal struck earlier this month raised the prospect of reduced sanctions against the state. The deal would lift Iran’s conventional arms embargo within five years and leave the country free to pursue long-range missile technologies within eight.”

“The proposed sale will modernize and replenish Saudi Arabia’s current Patriot missile stockpile, which is becoming obsolete and difficult to sustain due to age and limited availability of repair parts,” the Pentagon said in it’s written notification to Congress of the pending deal. “The purchase of the PAC-3 missiles will support current and future defense missions and promote stability within the region.”

Also see -$1.5B contract goes to Lockheed Martin for Patriot interceptors

“I think we saw quite clearly at Camp David when President Obama met with several of the Gulf partners back in May that missile defense cooperation would be a prime area of investment going forward as a way to bolster partner defense.”

— Melissa Dalton, a Middle East defense and security expert at the Center for Strategic and International Studies

The sale of so many PAC-3 missiles—the most advanced missile for the Patriot missile launcher and built by Raytheon is the latest in a string of high-priced, high-profile arms deals between the U.S., Israel, Saudi Arabia, and other Gulf Cooperation Council allies in the region. It marks the first major arms deal since the Iran nuclear deal struck earlier this month raised the prospect of reduced sanctions against the state. The deal would lift Iran’s conventional arms embargo within five years and leave the country free to pursue long-range missile technologies within eight.

[Read the full text here, at Fortune.com]

That could be bad for regional security, but it’s a boon for defense contractors who have already cut deals with Middle Eastern states worth roughly $6 billion in the months leading up to the historic nuclear accord. U.S. defense companies like Boeing, and General Dynamics [fortune-stock symbol=”GD”] are all poised to reap the benefits of a Middle East arms race. Given the threat, (or at least the perceived threat) posed by Iran’s collection of ballistic missiles, Raytheon and Lockheed Martin look to have a busy year ahead. Read the rest of this entry »