On Thursday, America's Defense Security Cooperation Agency announced (link opens in PDF) that it has notified Congress of plans to make a "foreign military sale" to Australia of up to 12 Boeing (NYSE:BA) F/A-18E/F Super Hornet fighter-bombers and 12 Boeing EA-18G Growler electronic warfare aircraft, along with associated equipment, parts, training, and logistical support.
The value of the planned sale is estimated at $3.7 billion -- shipping included -- and includes the planes, 48 installed General Electric (NYSE:GE) F414-GE-402 engines (and six spares), plus radar, ECM, avionics, and similar electronic equipment installed by contractors ranging from Northrop Grumman (NYSE:NOC) to Raytheon (NYSE:RTN) to Exelis (NYSE:XLS). (Building an F-18 is truly a team effort.)
Justifying the sale, DSCA advised Congress: "Australia is an important ally in the Western Pacific that contributes significantly to ensuring peace and economic stability in the region. Australia's efforts in peacekeeping and humanitarian operations have made a significant impact on regional political and economic stability and have served U.S. national security interests."
As such, DSCA reassured Congress: "This proposed sale is consistent with those objectives and facilitates burden sharing with our allies." Furthermore, "there will be no adverse impact on U.S. defense readiness." And finally, "the proposed sale of this equipment and support will not alter the basic military balance in the region."
Fool contributor Rich Smith has no position in any stocks mentioned. The Motley Fool owns shares of General Electric, Northrop Grumman, and Raytheon. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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