State-owned Saudi Arabian Military Industries (Sami) acquired a majority stake in Aircraft Accessories & Components Company (AACC) to boost its defence manufacturing capabilities and expand services in Middle East and North African markets.
AACC, a Saudi entity of the economic offset programme currently focuses on maintenance, repair and overhaul (MRO) for aircraft hydraulics and the acquisition is expected to increase the scope of operations of the company to include repairing and maintaining civil aircraft landing gear and helicopter maintenance capabilities, among other services. The value of the deal was not disclosed.
“Acquiring a majority stake ... is a key factor in the strategic development of Sami," said Andreas Schwer, chief executive of Sami. "The MRO market promises tremendous opportunities for us. All the necessary tools are already in place, and in the near future, we will add MRO for landing gear to AACC’s services.”
The latest acquisition comes as Sami plans 25 to 30 joint ventures over the next few years to build competencies in shipyards, aircraft assembly lines and other infrastructure with a target of reaching overall sales of $10 billion (Dh36.73) by 2025, Mr Schwer told The National earlier this year in Abu Dhabi.
By the end of 2019, global partnerships with companies from the US, western Europe, Asia and South Africa will be set up, spanning production to after-sale services, according to Mr Schwer.
Acquisitions and joint ventures will be primarily financed through Public Investment Fund (PIF), the kingdom's sovereign wealth fund, and also through government programs that provide grants related to its activities in the framework of the country's national Vision 2030 transformation programme.
The aviation industry in Saudi Arabia is booming in conjunction with the establishment of Sami and the General Authority for Military Industries (Gami), Mansour Al-Eid, chief executive of AACC said.
Sami and Gami "will both contribute to the localization of military industries, invest in building local capabilities, create jobs for Saudi citizens, and join efforts with national companies to achieve the objectives of the Saudi Vision 2030,” he added.