Bloomberg News

U.S. to Announce $10 Billion Arms Sale in Middle East

April 19, 2013

The Obama administration plans to announce an arms package to Israel, Saudi Arabia and the United Arab Emirates worth as much as $10 billion -- the centerpiece of Defense Secretary Chuck Hagel’s visit to the countries next week, according to U.S. officials.

The arms sold to Israel also will include an unspecified number of V-22 Osprey tilt-rotor transport aircraft, air defense radar and KC-135 refueling tankers; the U.A.E. will probably buy 26 F-16 jet fighters, and the Persian Gulf nation as well as Saudi Arabia will each buy precision missiles, said the official who provided details on condition of not being named before the deal is announced.

The missiles being discussed include an unspecified number of the U.S. Advanced Anti-Radiation Guided Missile, a new weapon being bought by the U.S. Navy, the official said. The missile, made by Alliant Techsystems Inc. (ATK:US), is capable of attacking ground radar used by countries fielding sophisticated integrated air defenses, such as Syria and Iran.

If the transaction goes through, it will be the first foreign sale of the V-22 tilt-rotor made by Boeing Co. (BA:US) and Textron Inc. (TXT:US)’s Bell Helicopter unit. The U.A.E. already ordered 80 F-16s made by Lockheed Martin Corp. (LMT:US) in the late 1990s, and Saudi Arabia operates a fleet of Boeing-made F-15 jets.

Boosting Capabilities

The move to beef up the capabilities of allies in the Middle East began with President Barack Obama asking then- Defense Secretary Leon Panetta to examine ways to boost Israel’s military edge in light of potential threats in the region, three U.S. defense officials told reporters today at a briefing. The U.S. suspects Iran of developing nuclear weapons and is concerned the Syrian regime led by Bashar al-Assad may use chemical weapons.

Following Obama’s direction, Panetta held a series of meetings with then-Israeli Defense Minister Ehud Barak on weapons the country would need, the three officials said, speaking on the condition of anonymity to discuss negotiations between countries. Bilateral discussions with Saudi Arabia and the U.A.E. were held over the last nine months, according to the officials.

Plans for the arms package to Middle East allies comes as Hagel prepares his first trip to the region since taking his Cabinet post in February. The weapons sales will be a centerpiece of the visit, the U.S. official said.

Arms Sales

During his visit to the region, Hagel will discuss and draw up a final list of items for each country, one of the U.S. defense officials said. That will be followed by formal “letters of request” from the buyers and negotiations on pricing and availability of weapons.

After that process, which could take many months, State Department and Pentagon officials would notify Congress for formal approval. Those notifications often take the form of a 20-day informal period, followed by a formal 30-day period when the Pentagon discloses in a public notice the potential equipment, quantities and prices.

The defense official said the Pentagon was consulting with Congress extensively on the process. If, as expected, Congress approves the arms package, there is usually a lag of months or years before orders and deliveries occur.

Saudi Arabia in 2010 agreed to buy 84 advanced F-15S aircraft from Boeing. The first jet from that order rolled off a St. Louis assembly line last month, one defense official said.

Final orders may also be smaller. The U.A.E. in 2011 ordered $3.49 billion of Lockheed-made theater missile defense systems after seeking about $6.95 billion of equipment in 2008.

Iran, Syria

At a broader level, Hagel’s visit to Israel, Jordan, Egypt, Saudi Arabia and the U.A.E. will probably focus on regional threats from Iran and Syria, said Aaron David Miller, a Middle East specialist at the Woodrow Wilson International Center for Scholars in Washington.

In Israel, Hagel “has to make clear on the psychological and emotional side that he gets it that they’re in a very dangerous and uncertain neighborhood,” Miller said in a telephone interview before details of the arms sales were known.

To that end, the announcement of an additional arms deal with Israel will probably be a highlight of Hagel’s meetings with his counterpart Moshe Ya’alon, as well as Israeli Prime Minister Benjamin Netanyahu.

Israeli Defense

The deal also underscores Obama’s comments last month in Israel that the Jewish state must have the capacity to defend itself against potential threats from Iran and from Syria.

The Obama administration also has funded Israel’s Iron Dome system, designed to shoot down short-range rockets. In its 2014 budget request the Pentagon sought $220 million to buy additional batteries of the missile defense system for Israel. If approved by Congress, that spending will be on top of the $486 million the U.S. has added for the system in recent years.

Saudi Arabia has been a long-time buyer of U.S. armaments and operates a significant American-made arsenal.

In 2010, the U.S. announced a deal with Saudi Arabia valued at $30 billion that included 84 Boeing-made F-15 jets and 72 UH-60 Black Hawk helicopters built by United Technologies Corp. (UTX:US)

Last year, the U.S. proposed selling to Saudi Arabia a fleet of 20 C-130J military transport planes, five KC-130J refueling aircraft and related equipment from Lockheed Martin valued at about $6.7 billion.

To contact the reporter on this story: Gopal Ratnam in Washington at gratnam1@bloomberg.net

To contact the editor responsible for this story: John Walcott at jwalcott9@bloomberg.net


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Companies Mentioned

  • ATK
    (Alliant Techsystems Inc)
    • $138.68 USD
    • 3.04
    • 2.19%
  • BA
    (Boeing Co/The)
    • $128.58 USD
    • 0.82
    • 0.64%
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