* Deal for 48 planes worth around $2.54 bln
* Chose Lockheed Martin's F-35 Joint Strike Fighter
* Rejected Saab's Gripen
* Deal biggest defence investment in Norway's history
* Lockheed stock up 1.2 pct, Saab closes down 12 pct
(Adds details, comments from news conference)
By Aasa Christine Stoltz and John Acher
OSLO, Nov 20 Norway will buy 48 of Lockheed
Martin's (LMT.N) F-35 Joint Strike Fighters, in a deal worth
about $2.54 billion, instead of Swedish Saab's (SAABb.ST) Gripen
to replace its ageing F-16 warplanes.
The deal is the biggest defence investment in NATO member
Norway's history, and the government said that total costs over
the lifetime of the aircraft are estimated at 145 billion
Norwegian crowns ($20.43 billion).
Norway says that it needs new-generation jets partly to
monitor its large northern seaboard, where Russia has boosted
military activities in recent years.
"Combat aircraft is a crucial capability for Norway's
defence," Prime Minister Jens Stoltenberg said in a statement on
"The Joint Strike Fighter is clearly best at fulfilling the
requirements we have set, and in addition (it) is the cheapest
plane," Stoltenberg told a news conference.
Norway said the U.S. planes would cost 18 billion Norwegian
crowns ($2.54 billion), which it said was 6 billion crowns
cheaper than the Gripens. Defence officials said that stealth
technology was one feature that put the F-35 ahead of others.
The defence ministry said total costs of owning the Gripen
plane over a 30-year lifetime were estimated at 20-30 billion
crowns higher than the JSF lifetime costs.
Norway has participated in the development of the JSF with
other NATO allies, while also running a competitive tender where
the Gripen has been the only other jet considered, after the
Eurofighter dropped out of the competition.
Defence officials have recommended that the F-16s be phased
out and replaced by the new F-35s in 2016-2020.
The selection of the JSF, also known as the "F-35 Lightning
II", continues decades of U.S.-Norwegian cooperation in defence
Buying the Swedish alternative would have been a new
departure that some politicians, especially on the left, had
hoped would herald the start of a new era in Scandinavian
Defence Minister Anne-Grethe Stroem-Erichsen said that
although much work had been done to land offset contracts for
Norwegian industry, the government needed to continue its work
"But already now, there are significant contracts to several
companies," she said. "There is technology here that Norway is
TENSION IN THE COALITION?
The choice of the American plane could cause tensions within
the Labour-led tripartite coalition government with less than a
year to go to a general election as the Socialist Left (SV)
party, a junior partner, had supported the Swedish jet.
"Now that we have to buy new combat jets, many had hoped
that it could be possible to choice a Swedish solution," SV
party leader Kristin Halvorsen said in a statement. "That could
also have given new, important security policy signals."
"Nordic defence and security cooperation will proceed
independently of the procurement of new combat aircraft and will
receive our continued support," the government said.
"The government underlines that from a Norwegian security
policy viewpoint, both candidates have been fully acceptable,"
Saab shares slid on the news and closed down 12 percent at
60.25 crowns in Stockholm. Lockheed Martin shares were up 1.2
percent at $70.16 in New York at 1817 GMT.
(Additional reporting by Terje Solsvik; writing by John
Acher; Editing by David Cowell)