By Avascent Analytics team
From the Analysis Desk: MBDA Reigns Supreme in the UK Missile Market as Anglo-French Relations Remain Strong
Despite Brexit, Anglo-French co-operation in the missile market is currently at an all-time high, boosted by a number of bi-lateral agreements and development programs forecast to be worth $1.29 billion 2017 to 2026. Click here to learn more.
A quick look at the biggest stories of the week
Qatar • Philippines • Germany • India • United States • Space
On September 17, Qatar’s Minister of State for Defense Khalid bin Mohammad Al Attiyah and the UK’s Defense Minister Michael Fallon signed a Letter of Intent for Qatar to acquire 24 Eurofighter Typhoons from BAE in a deal that could be worth up to $11.6 billion. This follows the procurement of 24 Dassault Rafales which Qatar signed in 2016 at a contract value of $7.5 billion and 36 F-15QA’s from Boeing signed in 2017 for $12 billion. If the Eurofighter Typhoon procurement goes forward, Qatar will spend approximately $31.1 billion on a total of 84 fighter jets over the next decade. Qatar currently operates a limited fighter fleet made up of twelve aging Mirage 2000s. This boost in fighter aircraft procurement comes at a time where Qatar is facing tension and isolation from neighboring Gulf countries over Qatar’s alleged support of terrorist networks in the region. It also speaks to the difficulty Qatar has had in the acquisition of various fighter aircraft in the last several years: namely, the Rafale (originally announced in April 2015) and the F-15 (which the US government was “poised to approve” in April 2016, actually signed in June 2017, and from which Qatar has yet to receive deliveries).
Note: The above graph does not include the potential Eurofighter Typhoon deal.
On September 14, the Philippine Air Force advanced its plans to acquire a ground-based air defense system. The current time frame for the acquisition is from 2018-2022. It is unclear which firm will win this contract, but Rafael, Diehl Defence, LIGNex1, MBDA, and Kongsberg are contenders. Rafael is offering their Surface-to-air Python and Derby (SPYDER) Medium Range, Diehl’s IRIS-T Surface-Launched, LIGNex1’s KM surface-to-air missile, Kongsberg’s NASAMS, and MBDA’s Land Ceptor.
On September 15, the German Defense Ministry announced a contract with a consortium consisting of Lurssen Defense, ThyssenKrupp Marine Systems, and German Naval Yards to construct five new Braunschweig-class (K130) corvettes by 2023. The original price tag for these ships was $3.2 billion for the five vessels. However, the German government estimated that the ships would only cost $1.7 billion considering that they would be based on an existing design that is currently in service with the Navy. The latest cost estimate for the new corvettes has now settled at $2.2 billion. The firms that make up the consortium building the Braunschweig corvettes are also competing to build the long delayed MKS-180 multirole combat ship. The MKS-180 project is estimated to cost around $4.3 billion, with the first of six ships to be delivered in 2023 provided further delays do not hinder this project.
India will soon receive the first Kalvari-class submarine built by Mazagon Dockyard in Mumbai and France’s Naval Group, formerly DCNS. The delivery comes twelve years after New Delhi initially signed a $4.26 billion contract for six boats to address a shortfall in submarines. The INS Kalvari will be the fourteenth boat in the country’s aging submarine fleet, which currently consists of nine Russian Kilo-class submarines and four German T-209s. The Navy argues it needs 24-26 vessels to address growing maritime threats from China and Pakistan. In a crisis, India would rely on submarines to deny the Chinese Navy access to the Indian Ocean through choke points in Southeast Asia. The Kalvari is expected to be commissioned by Prime Minister Narendra Modi in October.
In a surprise move that is rocking the defense industry, Northrop Grumman has announced a $9.2 billion deal to acquire Orbital ATK. The acquisition comes as a new wave of consolidation has emerged in the US defense industry in the wake of UTC’s acquisition of Rockwell Collins. By acquiring Orbital ATK, Northrop plans to not only drastically increase its positions in space, missile, and missile defense markets, but also vertically integrate portions of its supply chain, particularly on the B-21 stealth bomber. Most notably, the deal is likely to disrupt the Ground Based Strategic Deterrent competition as it solidifies Northrop’s subcontracting team, and likely limits Boeing’s supplier options to Aerojet Rocketdyne. The deal, which is valued at 22% over Friday’s closing price, includes $7.8 billion in cash and $1.4 billion in debt.
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