Failure is a blow to the company and to David Cameron, who intervened personally to try to secure the order© Rui Vieira/PABAE Systems had been in talks with the UAE for more than a year to supply 60 Typhoon jet fighters.
BAE Systems has missed out on a £6bn contract to supply fighter jets to the United Arab Emirates, in a blow to British export hopes and David Cameron's own attempts to secure a deal.
The UK arms manufacturer revealed on Thursday that more than a year of talks to supply 60 Typhoon aircraft to the UAE had failed. It also said vital negotiations with the Saudi government over the pricing of an existing Typhoon contract, keenly anticipated by shareholders, will drag into next year.
The news is a serious setback for BAE as it seeks to reduce its reliance on US and British defence markets that have been hit by government spending cuts. BAE's search for new sources of revenue has seen it pursue a failed merger with the Airbus owner Eads and launch a major push into emerging defence markets such as the UAE and India.
In its statement, BAE said: "BAE Systems and the UK Government have been in discussions with the Government of the United Arab Emirates regarding a range of defence and security capabilities including the potential supply of Typhoon aircraft. The UAE have advised that they have elected not to proceed with these proposals at this time."
The news is a blow not only to BAE but also to the prime minister, who intervened personally last month to try to secure a deal that would have represented a significant boost for British exports. During a visit to the UAE, Cameron urged Sheikh Mohammed bin Zayed Al Nahyan, the crown prince of Abu Dhabi, to opt for the Typhoon over a rival fighter produced by France's Dassault Systemes. Analysts thought the prime minister's move could have swung the deal for BAE, raising hopes that the UK will meet George Osborne's target of doubling exports to £1tn by 2020.
Comment: There's plenty of money in the coffers, apparently, for war, plunder and pillage - and it's always the most vulnerable who pay the price and suffer the consequences.