May 19, 2014 / 7:05 AM / 6 years ago

Saab shares fall after Swiss voters reject Gripen deal

STOCKHOLM, May 19 (Reuters) - Shares in Swedish defence materials group Saab fell sharply in early trading on Monday after Swiss voters blocked a purchase of 22 of the Swedish defence and aerospace group’s new Gripen E fighters.

In a referendum on Sunday, 53 percent voted to block a plan to replace Switzerland’s aging fleet of jets with the Gripen in a deal worth 2.5 billion Swiss francs ($2.8 billion) for Saab.

The full package for the modernisation of the Swiss air force, which also included infrastructure not supplied by Saab, was worth $3.5 billion and had raised opposition from opponents viewing the deal as an unnecessary expense.

Saab shares were down 5.3 percent by 0701 GMT.

The defeat is a setback for Saab but unlikely to derail the future development of the new version of the Gripen.

Saab, which said its outlook was not affected by the Swiss vote, has a framework agreement with Sweden for 60 new-generation jets. A majority in the Nordic country’s parliament want that number raised to 70.

However, Sweden had said it would not support development of the latest generation of the Gripen unless Saab could also sell the fighter to another country, helping to bring down cost.

In December, Saab won a tender to supply 36 planes to Brazil. ($1 = 0.8914 Swiss Francs) (Reporting by Niklas Pollard; editing by Simon Johnson)

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