Brazil awarded a $4.5
billion contract to Swedish Saab to replace its aging
fleet of fighter jets, a surprise coup for the Swedish company
after news of U.S. spying on Brazilians helped derail Boeing's
chances for the deal.
The contract, negotiated over the course of three presidencies, will supply Brazil's air force with 36 new Gripen NG fighters by 2020. Aside from the cost of the jets themselves, the agreement is expected to generate billions of additional dollars in future supply and service contracts.
Saab did not immediately comment on the purchase. In addition to Chicago-based Boeing Co With its F-18 Offer and France's Dassault Aviation SA with its Rafale was a contender for the contract.
The timing of the announcement, after more than a decade of off-and-on negotiations, appeared to catch the companies involved by surprise. Even Juniti Saito, Brazil's top air force commander, said on Wednesday that he only heard of the decision a day earlier in a meeting with President Dilma Rousseff.
Brazilian officials said the deal, one of the most coveted emerging-market defense contracts, went to Saab because it provided the most affordable option for the new jets, as well as the best conditions for technology transfer to local partners.
The choice, Defense Minister Celso Amorim said, "took into account performance, the effective transfer of technology and costs - not just of acquisition but of maintenance."
Until earlier this year, Boeing's F/A-18 Super Hornet had been considered the front runner. But revelations of spying by the U.S. National Security Agency in Brazil, including personal communication by Rousseff, led Brazil to believe it could not trust a U.S. company.
"The NSA problem ruined it for the Americans," a Brazilian government source said on condition of anonymity.
A U.S. source close to the negotiations said that whatever intelligence the spying had delivered for the American government was unlikely to outweigh the commercial cost of the revelations.
The contract, negotiated over the course of three presidencies, will supply Brazil's air force with 36 new Gripen NG fighters by 2020. Aside from the cost of the jets themselves, the agreement is expected to generate billions of additional dollars in future supply and service contracts.
Saab did not immediately comment on the purchase. In addition to Chicago-based Boeing Co With its F-18 Offer and France's Dassault Aviation SA with its Rafale was a contender for the contract.
The timing of the announcement, after more than a decade of off-and-on negotiations, appeared to catch the companies involved by surprise. Even Juniti Saito, Brazil's top air force commander, said on Wednesday that he only heard of the decision a day earlier in a meeting with President Dilma Rousseff.
Brazilian officials said the deal, one of the most coveted emerging-market defense contracts, went to Saab because it provided the most affordable option for the new jets, as well as the best conditions for technology transfer to local partners.
The choice, Defense Minister Celso Amorim said, "took into account performance, the effective transfer of technology and costs - not just of acquisition but of maintenance."
Until earlier this year, Boeing's F/A-18 Super Hornet had been considered the front runner. But revelations of spying by the U.S. National Security Agency in Brazil, including personal communication by Rousseff, led Brazil to believe it could not trust a U.S. company.
"The NSA problem ruined it for the Americans," a Brazilian government source said on condition of anonymity.
A U.S. source close to the negotiations said that whatever intelligence the spying had delivered for the American government was unlikely to outweigh the commercial cost of the revelations.
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