(Bloomberg) -- Saudi Arabian Military Industries and France's Naval Group SA entered a joint venture to develop vessels in the kingdom, which seeks to promote local manufacture of armaments.
The Saudi government-backed firm will hold a 51 percent stake and the French naval defense company will have the rest. The new company will develop, engineer and manufacture frigates, corvettes and possibly submarines, the chief executive officer of Saudi Arabian Military Industries, Andreas Schwer, said in Abu Dhabi.
Read More: Saudis Want to Make Their Own Weapons. Russia Is Eager to Help
SAMI, as the company is known, wants to raise local military procurement to 50 percent by 2030 from 2 percent today, though it's unclear how it could reach that target in so short a time. In November, it signed a deal with Spain's state-owned Navantia SA to manufacture warships domestically.
The joint venture with the French is another sign that business with Saudi Arabia is proceeding apace despite international condemnation of the murder of government critic Jamal Khashoggi in the kingdom's Istanbul consulate in October.
--With assistance from Abbas Al Lawati.
To contact the reporter on this story: Mahmoud Habboush in Abu Dhabi at mhabboush@bloomberg.net
To contact the editors responsible for this story: Shaji Mathew at shajimathew@bloomberg.net, Amy Teibel
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