Congress Asked to Approve $1 Billion Missile Sale to Saudi Arabia

The U.S. Defense Security Cooperation Agency notified Congress Thursday of plans to enter into a pair of foreign military sales contracts with the Kingdom of Saudi Arabia. If approved, the two contracts combined could be worth as much as $1.07 billion to principal defense contractor Raytheon (NYSE: RTN  ) . They involve a truly staggering amount of ordnance.

Together, the proposed transactions about which DSCA notified Congress call for the sale of:

  • 9,650 BGM-71 2A Tube-launched, Optically tracked Wire-guided (TOW) Radio-Frequency (RF) missiles
  • 4,145 BGM-71 2B TOW Aero RF missiles
  • 1,000 BGM-71 2A TOW missiles
  • 750 BGM-71 2B TOW missiles
  • and an assortment of 154 "fly to-buy" TOW2B and TOW2A missiles.

Thus, Saudi Arabia is seeking to purchase 15,699 missiles in total. All TOW missiles are designed primarily to be used as anti-tank weapons. TOW Aero missiles have greater range than the base model, while the TOW RF variant is designed so that it can be guided not only by wire but also radio-controlled. TOW Aero RFs have both extended range and the ability to be guided by radio control. Meanwhile, "fly to-buy" units are selected from a delivery lot at random for test firing as a cost-effective way of ensuring that a given batch of missiles is in working order. (They must still be paid for, however. Hence the name.)

DSCA did not say precisely why Saudi Arabia is stocking up such a very large amount of munitions, noting only that "the proposed sale will support the Ministry of the National Guard's defense and counter-terrorism missions. The sale will also improve Saudi Arabia's capability to meet and defeat current and future threats from enemy armored vehicles. Saudi Arabia will use the enhanced capability as a deterrent to regional threats and to strengthen its homeland defense."

At the same time, DSCA assured Congress that the proposed sales "will not alter the basic military balance in the region, and that they will not have any "adverse impact on U.S. defense readiness."


Read/Post Comments (0) | Recommend This Article (3)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Compare Brokers

Fool Disclosure

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2754728, ~/Articles/ArticleHandler.aspx, 9/29/2016 9:59:34 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated Moments ago Sponsored by:
DOW 18,325.62 -13.62 -0.07%
S&P 500 2,169.58 -1.79 -0.08%
NASD 5,310.56 -7.99 -0.15%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

9/29/2016 9:43 AM
RTN $138.73 Down -0.64 -0.46%
Raytheon CAPS Rating: ****