BAE shares fall amid Saudi contract fears

Shares in BAE Systems were on the slide today amid fears that Saudi Arabia could pull out of a deal to buy 72 Eurofighter jets.

Shares in BAE Systems were on the slide today amid fears that Saudi Arabia could pull out of a deal to buy 72 Eurofighter jets.

The Daily Telegraph said the Saudis were poised to hand the £76bn (€112.2bn) contract to France because of an investigation by the Serious Fraud Office in London into allegations that BAE in the past used a “slush fund” for payments to Saudi dignitaries to secure defence contracts.

The Eurofighter contract was BAE’s biggest export deal for 20 years and shares in the firm were down nearly 5% today. The stock has fallen more than 9% in the last two weeks, wiping £1.2bn (€1.8bn) off its value.

The UK government agreed a deal to supply Saudi Arabia with the new Eurofighter towards the end of last year as the Royal Saudi Air Force looked to replace the Tornado.

The Eurofighter was developed by a consortium of companies in the UK, Germany, Spain and Italy, with its UK base in Warton, Lancashire in England, where BAE employs 9,000 workers in its aircraft division.

But with the bribery investigation ongoing, the Saudis were today said to be ready to hand the contract to French firm Dassault for its Rafale jets.

The SFO said today that the investigation was “on-going” but said no charges have been brought.

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