Saudi Arabian Military Industries (SAMI), a two-year old company owned by the kingdom's Public Infrastructure Fund, has bought Riyadh-based Advanced Electronics Company for an undisclosed sum.

Advanced Electronics Company is an offset company set up by in 1988 engineering and defence contractors including the United Kingdom's BAE Systems to help Saudi Arabia build its own military and engineering capabilities.

A statement issued on Monday evening announcing the deal said that the firm "specialises in the design, development, manufacturing, maintenance and repair of several advanced industry and military electronic systems, devices and equipment" including control systems for various military aircraft. It added that the company, which has an 80 percent Saudization rate, increased revenue by 7.5 percent last year to 2.07 billion Saudi riyals ($552 million) from 1.925 billion riyals in 2017.

The statement said that following the deal, AEC will form the core of its defence technology systems business, and that the enlarged business would employ more than 2,200 people. It also said the deal would help SAMI's goal of developing its own products. One of the company's aims is to localise around 50 percent of the Saudi government's military spending.

SAMI’s chairman, Ahmed Al-Khateeb said: “Defence electronics is a mission-critical element of the defence sector, and the acquisition of AEC firmly establishes SAMI's presence on the global defence industry map.”

He added that the deal would help the company to “drive local content and stimulate economic growth”.

(Writing by Michael Fahy; Editing by Mily Chakrabarty)

(michael.fahy@refinitiv.com)

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