The United States denied Saudi Arabia a multibillion-dollar deal because of its cooperation with Russia and China.
The joint venture between RTX and Scopa was supposed to attract $25 billion in investments, and its annual revenue was projected at $17 billion
The United States closely monitors the ties of enterprises with Russian and Chinese companies, especially those under sanctions. In particular, a Saudi company, with the help of which Riyadh wanted to develop arms production, broke off a multibillion-dollar deal with a leading US defense corporation. The Americans believe that the risks of their technologies falling into the hands of enemies through the Saudis are too high.
Source. The Wall Street Journal writes about this.
Similar reasons forced some European companies to cancel contracts with the Saudis.
In 2022, Raytheon Technologies (RTX, a manufacturer of Patriot missile systems, NASAMS, and other equipment with annual revenues of more than $67 billion) signed a memorandum of understanding with Saudi Scopa Defense, which provided for the construction of a plant to produce modern air defense systems to protect the country from missiles and drones.
In addition to purely defensive purposes, the deal was considered part of Crown Prince Mohammed bin Salman's strategy to diversify the economy and exports, reducing the country's dependence on the oil industry.
According to the plan, the joint venture between RTX and Scopa was supposed to attract $25 billion in investments, and its annual revenue was projected at $17 billion, Nasr Algrairi, an American Navy veteran who was the CEO of Scopa, told The Wall Street Journal.
However, some time ago, RTX backed out of the deal, and the deciding factor was that firms associated with their Saudi partner were simultaneously trying to do business with sanctioned companies from Russia, Belarus and China, people familiar with the situation said.
RTX was afraid that information about the weapons produced together with Scopa could fall into the hands of the Russians or Chinese.
Several other Western companies, including Italian Beretta Defense Technologies (a manufacturer of weapons and optics) and Fincantieri (a shipbuilder), have also refused to cooperate with Scopa, the WSJ reports. According to the newspaper's sources, concerns about the Russians and Chinese played a decisive role in this decision.
Background. Meanwhile, it was reported that Middle Eastern countries are experiencing a boom in investment in Western companies. The political crisis following the murder of journalist Khashoggi is over, and money is flowing back into the region.
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