Wednesday, December 18, 2013

Brazil Goes Swedish

From International Business Times:

After a decade of discussion, Brazil’s President Dilma Rousseff announced Wednesday the acquisition of 36 Gripen NG fighter jets, from Sweden’s Saab (STO:SAAB-B), for the FX-2 program of the Brazilian Air Force.

Defense Minister Celso Amorim and Gen. Juniti Saito, the air force's chief of staff, said at a press conference after the official announcement that the planes will be delivered in 4 years. The total cost of the deal will be $4.5 billion.
"The choice took into account performance, technology transfer and cost, not only for acquisition but also for maintenance. The decision was based on the best balance of those factors," Amorim said. 
The decision puts an end to 10 years of speculation and delays on the transaction, which started as a plan under former President Luiz Inácio (Lula) da Silva. Three contenders stepped up to the bid: France’s Dassault (EPA:AM), with the Rafale model; Boeing Co. (NYSE:BA), with the F/A-18 e/F Super Hornet; and the eventual winners, with the smaller Gripen. In the early stages of the negotiation, Lula expressed preference for the Rafale, but the French contender fell out of favor at the end of Lula's second and last term in 2010, and was finally rejected on Tuesday due to its high cost.
The article goes on to cite the NSA scandal as the reason for Brazil picking Saab over Boeing who was offering the Super Hornet. Regardless, congratulations to Saab as this decision is a decade in coming and is well deserved in my opinion. 

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