BAE Systems shares fall over Germany’s ban on arms exports to Saudis

Defence company BAE Systems’ share price fell sharply on Thursday after it warned that a German ban on arms exports to Saudi Arabia, imposed after the killing of journalist Jamal Khashoggi, could scupper a multibillion-pound deal to sell Typhoon fighter jets.

Alongside its annual results on Thursday, BAE Systems stressed that its business is “reliant on the approval of export licences by a number of governments in order to continue supplies to Saudi Arabia”. The Gulf state accounted for around 14% of BAE’s annual sales in 2018, and is seen as a key customer for the Typhoon.

Germany is part of a four-country consortium that builds the Eurofighter Typhoon and its ban could threaten the future of lead partner BAE’s pending £10bn deal to sell 48 new jets to Saudi Arabia.

BAE said Germany’s arms export embargo could also threaten its maintenance and support contract with Saudi Arabia for the Typhoon, which currently brings in around £2.5bn in annual revenue for the UK firm.

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