Saudi Arabian Military Industries (SAMI) on Sunday signed an agreement to set up a joint venture with US Lockheed Martin to enhance the kingdom's "defence capabilities".
SAMI, which is owned by the Saudi state's Public Investment Fund (PIF), said in a statement that it will own a 51 per cent stake in the venture, adding that it aims to "develop localised capabilities by transferring technology and knowledge, and by training a Saudi workforce in manufacturing products for, and providing services to, the Saudi armed forces".
Although Saudi Arabia continues to be a major global arms importer, a number of Western countries have in recent years suspended arms sales to Riyadh over its involvement in the war in Yemen.
Lockheed Martin's Vice President Timothy Cahill said Sunday's deal marked a "major milestone" for the US company.
"This agreement is in line with Lockheed Martin's strategy to expand its partnership with the kingdom by providing reliable defense and security solutions," Cahill was quoted as saying in the statement.
In 2017, the Saudi Public Investment Fund established SAMI to manufacture weapons locally, with the ambition to become one of the largest defence companies in the world by 2030.