Abu Dhabi: The buying of Sikorsky Aircraft by Lockheed Martin will add to the company’s strong presence in the region particularly in the UAE and Saudi Arabia, an analyst, said adding that conflict in the region had sped up the procurement of weapons by different countries.
The US-based defence giant has bought Sikorsky Aircraft for more than $8 billion (Dh29.4 billion) in an acquisition considered as one of the biggest in the defence sector in recent times.
The deal is likely to give the manufacturer of F-35 fighter jet an edge in the market when compared to its competitors like Boeing and Northrop Grumman.
Lockheed Martin has a tie up with Advanced Military Maintenance Repair and Overhaul Centre (Ammroc) in the UAE, which is now part of Emirates Defence Industries Company to support the maintenance of Emirati military aircraft.
Charles Forrester, a senior defence research analyst at IHS Global, United Kingdom told Gulf News that there may be some changes to the share of ownership structure in Ammroc depending on the UAE’s Foreign Direct Investment and foreign ownership regulations.
“Lockheed Martin already has a strong presence in the UAE through their previous deals and related offset, so this transaction will undoubtedly add to it,” said Forrester in an emailed statement.
He said the new deal may have the effect of making Lockheed Martin and Sikorsky platforms more competitive against other US and European firms, with Lockheed Martin able to create more attractive packages in terms of procurements and offset agreements.
Sikorsky has announced during International Defence Exhibition and Conference (Idex) 2015 in February that they would open a regional office in Abu Dhabi this year as apart of their expansion plans in the region.
It is not known whether the office opening is on schedule or has been delayed due to the latest transaction. A spokesperson of Sikorsky Aircraft refused to comment when contracted by Gulf News.
A representative of Sikorsky said during Idex that it has delivered 400 helicopters to customers in the region and plans to expand over the next five to ten years in a proportional manner.
According to Forrester, the conflict raging in the region will speed up the process of buying military equipment from companies.
“A number of the countries buying equipment have had the requirements open for some time. What would have normally been a slower procurement process has been sped up by the procuring countries a bit because of conflict.”
Additionally, some countries, such as France, have been able to offer better terms for sales of equipment to the region for example, the Rafale sale to Egypt, he said.
“However, some countries still have long-held open requirements (e.g. the UAE’s fourth generation fighter procurement) that are still ongoing.”
The Middle East has turned into a battleground after the overthrow of number of governments in the last few years due to Arab Spring protests. Saudi Arabia and its allies have been fighting against Al Houthi rebels in Yemen where as Iraqi forces are trying to weed out Daesh terrorists from their country with the support of Gulf countries.
In Libya, conflict has been raging since the removal of Colonel Gaddafi in 2011. Egypt too is battling Daesh and other terrorist outfits.
Paramount Group, Africa’s defence and aerospace company said that spending across the Mena (Middle East and North Africa) region last year grew 12.1 per cent to $120.6 billion, making it the fastest-growing region in percentage terms in the world.
According to it, GCC (Gulf Cooperation Council) countries has been particularly high over recent years, and now accounts for about 83 per cent of overall military spending in the Middle East.