In what promises to be perhaps the biggest international arms deal of the year, the Department of Defense confirmed in a press release last night that Secretary of Defense Chuck Hagel has just signed an agreement to sell the Persian Gulf nation of Qatar $11 billion in advanced U.S. military hardware.
The deal, signed Monday between Hagel and Qatari Minister of State for Defense Affairs Hamad bin Ali al-Attiyah, calls for the delivery of Apache helicopters and Patriot and Javelin defense systems valued at $11 billion, according to the Department of Defense. In a statement, Pentagon Press Secretary Rear Adm. John Kirby asserted that: "Today's signing ceremony underscores the strong partnership between the United States and Qatar in the area of security and defense and will help improve our bilateral cooperation across a range of military operations."
It will also bring billions of dollars of new revenues to the three companies primarily responsible for building and supplying the new weapons, Boeing (NYSE:BA), Lockheed Martin (NYSE:LMT), and Raytheon (NYSE:RTN).
Apache helicopters, of which media reports say two dozen will be delivered to Qatar, are built by Boeing. Patriot missile batteries, of which 10 are now on order, are built by Raytheon and Lockheed Martin. Reportedly, the actual missiles to be launched from these batteries will include 247 PAC-3 missiles and 117 of the even more advanced "Guidance Enhanced" Patriot missiles, known as GEM-Ts.
Likewise, Raytheon and Lockheed will build the 500 Javelin anti-tank missiles that Qatar now has on order.
Breaking down the numbers, analysts put the value of the Patriot missile sale at in excess of $7 billion, with the Apaches making up more than $3 billion of the arms sale, and the Javelins costing only $100 million.
Additional sales could follow. Qatar is currently considering upgrading and replacing its fleet of 12 Dassault Mirage fighter jets, with Britain's BAE, France's Dassault, and also Boeing bidding for the work.
Rich Smith owns shares of Raytheon Company. The Motley Fool owns shares of Lockheed Martin and Raytheon Company. Try any of our Foolish newsletter services free for 30 days. We Fools may not 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.