Concern over long-term impact

After years of debate, six parties have agreed on a democracy criterion when evaluating arms sales. The new criterion will have an impact on Saab, the defence and security group, which reported sales of SKr 28.6 billion in 2016. Besides the Gripen fighter jet, one of Saab’s most important products is GlobalEye, the multi-role airborne surveillance system. Saab’s export market, which accounts for 60% of the group’s sales, is of huge importance to GlobalEye.

Douglas Lindahl, analyst at Kepler Chevreux, sees the new criterion as bad news for Saab, which has major interests in deals that could now be at risk.

Last year Saab was given the go-ahead to export GlobalEye to Saudi Arabia, which leads the intervention in Yemen, and the company views the Kingdom on the Arabian Peninsula as a growth market, according to Lindahl.

Saab does not wish to comment until it has more information, but a number of analysts DI has spoken to believe that Sweden will circumvent the rules, as it has done in the past, in order to protect its defence industry.

Meanwhile, Tommy Gustafsson-Rask, CEO of BAE Systems Hägglunds is positive to the fact that broad agreement has been reached after two years of uncertainty. Simultaenously, there is concern about the long-term impact of the criterion.