Saudi Arabia's $1bn bid for Denel partnership

Saudi Arabia has made a $1bn bid for a broad partnership with state-owned defence group Denel that would include acquisition of a minority stake in a joint venture with Germany’s Rheinmetall, a source familiar with the offer is quoted as saying in a City Press report. Saudi Arabia, the world’s third-largest defence spender, is seeking partnerships to develop its own domestic defence industry with the goal of localising half of its military spending by 2030. Saudi Arabian Military Industries, the kingdom’s state defence company, reportedly told Reuters last month that it was in discussions with all major South African firms and aimed to conclude the first deals by the end of this year. Saudi Arabia is targeting Denel’s 49% stake in Rheinmetall Denel Munition (RDM). RDM is a South African-based joint venture formed in 2008 between Denel and Rheinmetall Waffe Munition GmbH, which holds the remaining 51% stake. It specialises in the development, design and manufacture of medium and large-calibre ammunition including artillery shells.