Lockheed Martin Corporation (NYSE:LMT) and Pentagon are reached a $4 billion deal, in which global security and aerospace company will provide additional missile defense equipment to US and UAE.
According to the Pentagon’s major weapons contracts, the deal with the company, it involves its missile defense system Terminal High Altitude Area Defense (THAAD) that is develop to catch ballistic missiles in midair.
Founder of Missile Defense Advocacy Alliance (MDAA), the non-profit organization Riki Ellison, said the deal indicates increasing demand and confidence for the missile defense system.
THAAD program manager and vice president of Lockheed Martin Corporation (NYSE:LMT) Mat Joyce, said in his comment that the contract is under negotiation for several years, will jointly delivers orders for the United Arab Emirates and United States, which would also make 10% savings for the US.
The Pentagon also added in its statement, according to deal Lockheed Martin Corporation will provide approximately 110 interceptors for the U.S. Army and 192 interceptors for the United Arab Emirates. But the company is restricted to provide all the data and equipment till the end of fiscal 2014 that is worth $352 million. And in exceptional case the extended date will be 31 December of that year.
Due to increase in the U.S. defense budget, this deal will provide an opportunity for the US to purchase the technology at lower price, in order to avoid high prices and additional amounts. While US, is also expanding this missile technology beyond its boarder and is in negotiation with Qatar on a potential trade of the THAAD missile defense technology. While other countries including South Korea, Japan and Saudi Arabia.
Last week the primary operational test of the THAAD missile system, under the supervision of U.S. Missile Defense Agency, where its reliability, work strategy and its capability to work collectively with the Aegis battle system on a guided-missile demolisher. During the testing period the missile shoot medium-range ballistic missile, those were fired almost simultaneously. Lockheed Martin Corporation (NYSE:LMT) shares fell -1.83% to $128.00 in last trading session.