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Saab looks for M&A opportunities abroad, hopes Sweden’s NATO entry boosts GlobalEye chances - Breaking Defense

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Saab has strongly hinted that Sweden’s NATO membership could strengthen GlobalEye (background) sales. (Saab)

BELFAST — The head of Swedish manufacturer Saab told investors today it is assessing merger and acquisition (M&A) opportunities across “key markets” to drive growth by potentially adding a number of “mini-Saabs” outside of Sweden, while the firm separately evaluates how Stockholm’s eventual entry into NATO might change Saab’s competitive landscape.

“A portion of our growth ambition includes M&A opportunities. I’m not going to talk about sizes [of companies under consideration] but of course we have a pipeline when it comes to important countries like the UK, US and we will also maybe look at Germany,” Micael Johansson, Saab CEO, said during a second quarter results call. “Really, those key markets are where we build capability, which I call mini-Saabs, that’s where we are looking. It’s all about opportunity and valuations, but I can’t say more than that.”

Johansson said that he also expects “better chances to support growth” resulting from Sweden’s accession to NATO, as the move will provide “more of a level playing field” for the company to secure GlobalEye AEW&C aircraft sales, especially with priority given to the alliance’s Allied Future Surveillance and Control (AFSC) capability program. That acquisition calls for the replacement of the alliance’s E-3A fleet, set to retire in 2035.

RELATED: Saab predicts ‘great possibilities’ in Sweden’s NATO entry

AFSC competitors, which also include US manufacturers Boeing’s E-7 Wedgetail and Northrop Grumman’s E-2D Advanced Hawkeye, were all asked in December 2022 to share pricing, availability and capability details of their respective aircraft with NATO.

Saab has lost a host of competitive tenders to Lockheed Martin when pitching the multi-role Gripen E/F fighter jet against the US prime’s F-35 fifth generation platform, and export orders for GlobalEye have so far proved difficult, with the exception of a purchase of five units by the United Arab Emirates.

Johansson noted that the fourth UAE aircraft is currently undergoing test evaluation with the same process to follow for a fifth aircraft before the end of 2023.

Since Sweden received NATO invitee status in July 2022, Saab has been invited to “many” forums to discuss “new capabilities and how to boost capacity,” and also been privy to alliance defense planning more generally, added Johansson.

“It’s a real uphill battle to provide important capability like airborne early warning and control” to NATO when outside the alliance, he added, though stressing that once that changes when Sweden joins, there will be “more of a level playing field,” in terms of securing new aircraft sales.

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