March 31, 2015 / 10:29 PM / 4 years ago

Lockheed sees PAC-3 missile deal with South Korea in coming months

WASHINGTON (Reuters) - Lockheed Martin Corp said on Tuesday it expected to complete a contract in coming months to supply an undisclosed number of PAC-3 missiles to South Korea, following Monday’s announcement by that country’s defense acquisition agency.

The U.S. government and South Korea signed a letter of agreement about the foreign military transaction on March 13, Dan Garcia, Lockheed’s senior manager for international air and missile business development, told Reuters.

He said it will likely take several months to complete a contract formalizing the deal, which also includes launcher modification kits and computers that tell the missile where to go and what to do. He gave no details on the size or value of the potential sale.

South Korea’s Defense Acquisition Program Administration on Monday announced an overall plan valued at $1.18 billion to buy the new missiles, and have Raytheon Co upgrade its Patriot missile defense system under a direct commercial sale.

The deal is part of an ongoing effort by South Korea to strengthen its arsenal amid growing concern about missile developments by North Korea.

Also on Monday, Raytheon announced it had been awarded a contract valued at $769.4 million to upgrade an undisclosed number of Patriot missile defense systems to the latest configuration fielded.

Garcia said the remaining funds included Lockheed’s part of the deal, as well as separate equipment to be furnished by the U.S. government.

Lockheed has provided South Korea with information about its PAC-3 Missile Segment Enhancement, which would give Seoul’s Patriot system added capability, Garcia said, but he gave no timetable for a possible additional order.

Lockheed, the Pentagon’s No. 1 supplier, also has provided information to South Korea and the U.S. government to support a possible sale of its Terminal High Altitude Area Defense (THAAD) system, which provides a defense against short- to medium-range ballistic missiles, Garcia said.

The THAAD system intercepts hostile incoming missiles high in the earth’s atmosphere, or outside it, while the Patriot system covers lower altitudes.

Reporting by Andrea Shalal; editing by Gunna Dickson

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