Riyadh – Mubasher: Saudi Arabia has offered $1 billion to partner with military technology provider Denel, a source told Reuters, adding that the bid includes a minority stake in joint venture (JV) Rheinmetall Denel Munition (RDM).
The Kingdom seeks to acquire Denel’s 49% stake in RDM, the unnamed source said on Thursday.
Based in South Africa, RDM is a designer, developer, and manufacturer of medium and large-caliber ammunition including artillery shells. It is also a JV between Denel and Rheinmetall Waffe Munition GmbH.
“Saudi Arabia has made a unique business proposition to the South African government. As our discussions are not finalised yet we cannot provide any comment,” Saudi Arabian Military Industries’ (SAMI) CEO Andreas Schwer told the news agency.
The deal comes as part of Saudi Arabia’s move to prop its domestic defence industry as part of an objective to localise half its military spending by 2030.
Saudi Arabia is the world’s third largest spender on defense weapons and technology.
In October, SAMI told Reuters that it began negotiations with all large South African companies in the hopes of concluding agreements by the end of 2018.
On Wednesday, SAMI signed a deal with Spanish firm Navantia to launch a JV called SAMI Navantia Naval Industries, which will design and build five cutting edge “Avante 2200” corvettes.
