Please ensure Javascript is enabled for purposes of website accessibility

Congressional OK Sought for F-15 Sale to South Korea

By Rich Smith - Apr 4, 2013 at 10:10AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

South Korea needs new fighter jets. Boeing would like to sell it some, Congress permitting.

The Defense Security Cooperation Agency announced on Wednesday (link opens in PDF) that it has notified Congress of plans to make a "Foreign Military Sale" to South Korea of 60 Boeing (BA -1.01%) F-15SE "Silent Eagle" fighter jets. The sale, which would be structured as a direct commercial sale from Boeing to the Republic of Korea, is estimated to be worth $2.4 billion once the cost of associated equipment, parts, training, and logistical support are factored in.

Justifying the sale, DSCA advised Congress that "this proposed sale will contribute to the foreign policy goals and national security objectives of the United States by meeting the legitimate security and defense needs of an ally and partner nation ... [augmenting] Korea's operational aircraft inventory and enhance[ing] its air-to-air and air-to-ground self-defense capability, provid[ing] it with a credible defense capability to deter aggression in the region." 

DSCA further advised that as the F-15SEs are delivered, the ROK Air Force plans to decommission the ancient F-4 Phantom fighter jets currently in its arsenal to make way for the new planes. Hence, "Korea will have no difficulty absorbing this additional equipment and support into its inventory."

As in a similar notification that DSCA gave Congress regarding a proposed F-35 fighter jet sale to South Korea by Lockheed Martin (LMT 2.56%), DSCA made clear that South Korea will not necessarily buy the F-15SEs, even if Congress approves the sale. Rather, South Korea is holding a competition to choose its next generation of fighter jets. Congressional preapproval of a sale would pave the way for Boeing's participation in this competition.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

The Boeing Company Stock Quote
The Boeing Company
BA
$136.31 (-1.01%) $-1.39
Lockheed Martin Corporation Stock Quote
Lockheed Martin Corporation
LMT
$425.89 (2.56%) $10.64

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
323%
 
S&P 500 Returns
112%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 07/06/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.