Saudi Companies Secure Sub-Contracts for Lockheed Martin's THAAD Defense System

Lockheed Martin announced on Monday that it has inked agreements with Saudi Arabian companies to produce components for its Terminal High Altitude Area Defense (THAAD) air defense system.

According to a statement by Lockheed Martin, these sub-contracts mark a collaborative effort to transfer technological expertise, ultimately fortifying Saudi Arabia's position in the defense sector.

State-owned Saudi Arabian Military Industries (SAMI) reportedly signed a total of 11 agreements during the Saudi defense show held in Riyadh, as reported by the country's state news agency.

This strategic move comes against the backdrop of escalating tensions in the region, with some shipping companies opting to suspend transit along the Red Sea route due to concerns about potential attacks by Yemen's Iranian-backed Houthi group. The Houthi rebels have been utilizing exploding drones and missiles to target vessels since November, citing retaliation against Israel's military operations in Gaza.

Despite the regional volatility, the Biden administration has maintained its support for Saudi Arabia, endorsing the deployment of the Terminal High Altitude Area Defense (THAAD) system initially approved in 2017. The THAAD system is designed to counter ballistic missile threats and enhance the country's defense capabilities.

Lockheed Martin highlighted Middle East Propulsion Company (MEPC) and Arabian International Company (AIC) for Steel as the prime partners set to receive sub-contracts under this deal, further underscoring the collaboration between the U.S. defense contractor and Saudi entities.

In a parallel agreement, Boeing Saudi Arabia (BA.N) and Bahri Logistics, a unit of Saudi Arabia's national shipping company, have signed a strategic Memorandum of Understanding (MoU). The MoU aims to strengthen supply chain activities within the country and enhance Bahri Logistics' support for services and defense-related products.