BAE Systems agrees pricing on Salam deal with Saudi Arabia

LONDON, Feb 19 (Reuters) - British defence contractor BAE Systems BAES.L has agreed pricing with Saudi Arabia over a long-running Eurofighter jet deal with the Gulf state, capping years of talks which had repeatedly forced it to defer earnings.

BAE has had to repeatedly trim its full-year earnings forecasts as it failed to settle on price over the so-called Salam deal. The Gulf state agreed to buy 72 Eurofighter jets in 2007 for 4.43 billion pounds at the time.

"Both Governments have now agreed price escalation terms relating to the Typhoon aircraft under the Salam programme and these have been reflected in contractual arrangements between the UKG and BAE Systems," the company said on Wednesday.

It said the terms of the agreement were broadly consistent with the company's prior trading outlook for 2013. Cash settlement is expected to follow the pricing agreement, commencing in the early part of 2014.

BAE builds the Eurofighter alongside European aerospace group Airbus AIR.PA and Italian defence contractor Finmeccanica

(Reporting by Brenda Goh, Editing by Paul Sandle)

((brenda.goh@thomsonreuters.com)(+44 020 7542 2230)(Reuters Messaging: brenda.goh.thomsonreuters.com@reuters.net))

Keywords: BAESYSTEMSSAUDIARABIA/