Saudi Arabian Military Industries (SAMI), a wholly-owned subsidiary of the Public Investment Fund (PIF), has bought defense, energy, ICT and security services specialist Advanced Electronics Company (AEC), the country’s largest-ever military industries deal.
The acquisition is expected to be completed in the first quarter of 2021, after receiving the regulatory approvals and AEC will become a 100 percent Saudi-owned company.
“This deal strengthens SAMI’s presence in the strategically important defense industries market and supports its plans to transfer and localize the military industries. The acquisition will also enhance AEC’s opportunities to expand and compete in its field. It will shape the future of the domestic defense ecosystem and make long-lasting contributions to the national economy for the upcoming years, through skills development, employment generation, and exports.”
The acquisition was announced during a ceremony organized by SAMI in the presence of the members of SAMI and AEC and senior officials from the Ministry of Defense, General Authority for Military Industries (GAMI), PIF, Saudi Arabian Airlines (Saudia), BAE Systems Saudi Arabia and other stakeholders.
The deal is in line with Saudi Arabia’s Vision 2030 economic diversification strategy, under which the PIF plans to localize over 50 percent of military equipment spending. Currently, around 85 percent of AEC’s employees are Saudi nationals, including 500 engineers.
SAMI stated that with the acquisition of AEC, it aims to expand its business and enter the progressive defense electronics sector and further the deal would help it to transfer technologies and localize domestic military industries, as well as strengthen Saudi Arabia’s defense ecosystem.
“SAMI’s acquisition of AEC stock will help us reach our goals and strategic plans for the next five years. It also places us under the umbrella of the Public Investment Fund (PIF), which constitutes a milestone for the company,” Abdulaziz Al Duailej, CEO of AEC, said.
Founded in 1988, Advanced Electronics Company (AEC) operates in fields of modern electronics, manufacturing, system integration and repair and maintenance services. The company has more than 100 strategic partners and has completed more than 1,000 projects in the country. In recent years the company has witnessed stable growth, with its total sale in 2019 reached about $618.67 million.
Saudi Arabian Military Industries (SAMI) was established in 2017 by the PIF, it has played a prominent role in Saudi Arabia’s efforts in creating self-sufficient defense capabilities through its fast-growing portfolio of military products and services including aeronautics, land systems, weapons and missiles, defense electronics, and emerging technologies.