Saudi Arabian Military Industries (SAMI), the state-owned defense company, has signed on Sunday a preliminary agreement with France's Naval Group on the creation of a joint venture for the construction of warships in the kingdom.
"The joint venture will design, build and maintain military ships, which will make a significant contribution to the further expansion of the capabilities and combat readiness of the Royal Saudi Navy", SAMI CEO Andreas Schwer said, commenting on the deal.
Schwer noted that SAMI would be the majority shareholder in the joint venture.
The signing ceremony of the agreement, which provides for the construction of warships, frigates and corvettes, was held on the sidelines of the IDEX-2019 defense exhibition in Abu Dhabi.
SAMI was established in 2017 to develop the Saudi military industry, and aims to produce domestically half of the weapons needed by the kingdom by 2030, according to the kingdom’s economic development plan initiated by Saudi Crown Prince Mohammed bin Salman.
After the assassination of the Washington Post columnist Jamal Khashoggi in October at the Saudi consulate in Istanbul, a number of EU countries suspended arms export to the Kingdom, alleging the country's leadership to be behind the case.
According to the Spiegel magazine, France and Germany have agreed a common approach to exports of weapons they have been building together. The deal was reportedly struck in mid-January and complements a general pact on bilateral ties signed in Aachen later that month. In particular, the document provides France with more leeway in choosing arms buyers after the two EU countries clashed previously over exports to third countries.
French President Emmanuel Macron has said that he was against making decisions by impulse and that arms sales to Saudi Arabia had "nothing to do" with the Khashoggi case. According to media reports, France, whose 13.5 percent of arms exports come to Saudi Arabia, therefore does not want to cancel contracts with Riyadh.
Macron’s stance reportedly could also be connected with the 2015 Mistrals case, when Paris terminated the contract for helicopter carriers that were to be delivered to Russia amid the Ukraine crisis. These ships were finally sold to Egypt, but the operation was very expensive for France, also in terms of image as a reliable international business partner.