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RTX (NYSE:RTX) until early this year was working on a multibillion-dollar deal with a Saudi weapons firm until it was canceled abruptly. The U.S. aerospace and defense giant was concerned that the Saudi partner’s companies were seeking to do business with banned Chinese and Russian entities, The Wall Street Journal reported Thursday, citing people familiar with the matter.
Those worries led an advisory board of retired U.S. military officers to resign from Scopa Defense, a Saudi company formed to advance the country’s arms industry. Scopa fired an American chief executive who voiced concerns about the sanctions to the company’s owner and U.S. officials, the Journal reported.
As a result, other major Western defense companies are re-evaluating their agreements with Scopa because of worries about engagement with Russian and Chinese entities.
The breakdown in talks with RTX (RTX), formerly Raytheon Technologies, shows Saudi Arabia’s challenges in diplomatic and business relationships with China and Russia that U.S. officials say are a threat to national security, the Journal reported.
RTX (RTX) and the Saudi government didn’t respond to the newspaper’s requests for comment.
