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Major fighter jet win for Saab

Article By: ,  Financial Analyst
December 19, 2013 10:15 AM

Saab has beaten off strong competition from companies such as Boeing to win a major fighter jet contract in Brazil.

The Swedish manufacturer was not believed to be a frontrunner for the deal, but also defeated Dassault Aviation to land the $4.5 billion (£2.7 billion) contract.

Saab will now supply Brazil with 36 new fighter jets, after Boeing's bid was affected by a row between the Latin American country and the US broke out over the NSA spying scandal.

Brazilian leader Dilma Rousseff was furious after the US National Security Agency intercepted emails and messages from the president herself, as well as her aides and the Brazilian state oil company Petrobras, reports BBC News.

David Fleischer, a political scientist at the University of Brasilia, explained that Ms Rousseff "had been favouring the Boeing plane and a lot of people thought she would announce her decision during her state visit to Washington". He added: "Boeing was very close but then the NSA booted them out of the air."

State response

Defence minister Celso Amorim announced that the authorities in Brazil "took into account performance, the effective transfer of technology and costs – not just of acquisition but of maintenance" while finalising the supplier of the fighter jets contract.

The major win for Saab comes only a short time after the company confirmed production has restarted at its plant in western Sweden. Saab revealed that it has begun making the 9-3 sedan model again, with the electric version of the car delayed.

Mikael Oestlund, a spokesman for Saab owner National Electric Vehicle Sweden, told the AFP news agency that the car will be much the same as it was before production was ended due to the Swedish company's financial difficulties.

It would have been a second major contract win for Boeing this month, as the company recently won an order for 61 of its MAX planes from Air Canada in a deal worth billions of pounds.

The share price of Boeing is 0.21 per cent down in after-hours trading in the US today (December 19th).

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