SAUDI Arabian Military Industries (SAMI) has signed a term sheet agreement to acquire 100 per cent ownership in Advanced Electronics Company (AEC), an offset programme company.

The agreement signing took place at a Saudi Arabia – UK industry event in London, in the presence of senior shareholder representatives, including Ahmed Al Khateeb, chairman of SAMI, and Sir Roger Carr, chairman of BAE Systems, said a company statement.

SAMI’s investment in AEC, the Riyadh-based firm specialising in engineering, development, manufacturing, repair and technical support across defence, Information Communications Technology (ICT), energy, cybersecurity and high-tech fields, at the local, national, regional, and international levels, comes as part of SAMI’s ongoing efforts aimed at increasing local defence manufacturing in the kingdom, in line with the directives of the Saudi Vision 2030, it said.

Al Khateeb said: “The foundation for the institution and growth of our company was laid three years ago with the announcement of the Saudi Vision 2030. Our journey began in 2017, and since then we have forged ahead with the backing of our country’s leadership, steadfast efforts of our team and support of our partners. Today’s agreement marks a significant milestone for us, as we advance our efforts to build a strong, dynamic and sustainable military industries sector in Saudi Arabia.”

Al Khateeb added: “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. Furthering our aspirations in the sector, it will help us drive local content and stimulate economic growth.”

Established in 1988 under the Saudi Economic Offset Program, and under the ownership of a number of companies, including international defence, aerospace and security company BAE Systems, AEC has played a pioneering role in the fields of modern electronics, manufacturing, system integration, and repair and maintenance services for nearly three decades, thereby becoming a major regional player renowned for innovation.

AEC specialises in the design, development, manufacturing, maintenance and repair of several advanced industry and military electronic systems, devices and equipment such as smart electricity and water meter systems, security protection systems for the vital infrastructure, industrial control systems, sight systems for the Typhoon aircraft, jammer and interference systems for the F-15 aircraft, electronic units for the F-16 aircraft, land equipment and training simulators for the Hawk 165 aircraft, and sight systems for the Tornado aircraft, among others.

AEC’s evolutionary growth has seen the company play a key role in localising military manufacturing, deploying smart technologies, and accelerating industrial and commercial growth, while maintaining a Saudisation rate of over 80 per cent and 100 per cent completion rate across more than 1,000 projects.

AEC has developed its own framework, Aligned Integrated Methodology (AIM), which provides a standardised approach to governance and delivery, and comprises methodologies in Portfolio, Program and Project Management.

Over the past few years, AEC has witnessed a steady growth in its sales year on year, with net sales in 2018 rising to SR2.07 billion ($551.91 million), compared to SR1.925 billion ($513.25 million) in 2017, and SR 1.65 billion ($439.92 million) in 2016.