Defence contractor BAE Systems today said it has agreed a price increase over its long-running deal to supply Typhoon jets to Saudi Arabia.
The contract for 72 jets, known as the Salam deal, was first signed with Saudi Arabia in 2007 but has been delayed by pricing negotiations, casting a shadow over BAE’s plans to return £1 billion to investors through a share buyback programme.
BAE is due to report its annual results tomorrow and chief executive Ian King said the agreement with the Saudi government was “an equitable outcome for all parties”.
He added: “I am pleased that we have been able to conclude this negotiation, which builds on our long-standing relationship with this much-valued customer.”
Shares in BAE opened 3.5 per cent higher at 452.9p this morning.