Israel says US has approved Arrow 3 sale to Germany

An Arrow 3 is tested by IAI. (IAI)

JERUSALEM — Israel’s Ministry of Defense today announced that the US has approved the sale of the Arrow 3 air defense system to Germany.

The final process in the procurement is expected to take place by November, according to statements from Israel’s Ministry of Defense. Arrow, which is used to defeat exo-atmospheric threats such as ballistic missiles, is expected to have an initial operational capability by 2025 for Germany and be fully operational by 2030.

“The U.S. government’s approval of the delivery of the ‘Arrow 3’ missile defense system is an expression of confidence in the excellent capabilities of Israel’s defense industries,” said Israel Defense Minister Yoav Gallant in a statement. “This is a significant decision, which will contribute to Israel’s force buildup and economy. It is also particularly meaningful to every Jewish person, that Germany is acquiring Israeli defense capabilities.”

The system was jointly developed by the US and Israel, with Israel Aerospace Industries as the primary contractor. Because of the US role in developing the weapon, Washington had final say on whether it could be exported or not. And while there was some early concerns the Biden administration would not approve the sale in order to promote an American-built alternative, the process seemed to move fairly smoothly since Germany’s announcement last year that it would seek to buy Arrow.

Boaz Levy, CEO of IAI, had indicated that he believed the Arrow sale would be approved soon, and Germany had moved to fund the purchase of the system in June, with a goal of fast procurement.

The sale comes amid growing concerns in Europe regarding air defenses in the wake of Russia’s invasion of Ukraine last year. In addition the US approval comes two weeks after the White House also ok’d the sale of David’s Sling, another co-developed air defense system, to Finland.

David’s Sling and Arrow make up the top two tiers of Israel’s multi-layered air defense systems. David’s Sling is made by Rafael in Israel and its partner is Raytheon in the US.

The $3.5 billion dollar deal is Israel’s largest defense deal, the Israeli Ministry of Defense said. This comes after record breaking $12.5 billion in sales for Israel’s defense industries last year. Earlier this week, IAI said that last year was the most profitable year in the company’s history with sales of $2.54 billion and a backlog of orders amounting to $16.4 billion.

“Once approvals from both parliaments are obtained, the full contract will be ready to sign by the end of 2023,” the Israeli statement added. According to the statement, while IAI is the primary contractor and supplies the system and radar, Elbit Systems developed the BMC command and control system for Arrow 3 and “Tomer, [an Israel] government-owned company, Rafael Advanced Defense Systems and Stark Aerospace, Inc, – a U.S. subsidiary of IAI are the main subcontractors responsible for the development and manufacturing of the Arrow 3 interceptor.”

Said Gallant, “Our cooperation with the U.S. government is essential to the system’s development process and to the achievement of this significant agreement. This reflects once again the powerful defense ties between the U.S. and Israel,” he said.

Director General of the Israel Ministry of Defense, Brig. Gen. (res.) Eyal Zamir said that some of the proceeds from the sale will go toward bolstering Israeli defense systems. “System components currently manufactured in the USA for Israel will also be produced for Germany, further strengthening our partnerships with the U.S. industrial base,” he said.

The rapidity with which the large procurement has taken place means that Israel and IAI have said they are already beginning to work to meet the commitments by 2025. According to a briefing held by the Ministry of Defense with Director of the Ministry of Defense’s Israel Missile Defense Organization (IMDO), Moshe Patel, sub-contractors in the US and IAI’s Stark Aerospace will participate such that fifty percent of the production of the system will take place from the US. Stark will produce many sub-systems and the integration will be completed in Israel and then delivered to Germany, according to the Ministry’s briefing on the sale.

Patel noted at the briefing that “Germany is buying not a singular system, but a full architecture that can protect all German citizens in all of Germany.” IAI’s Levy, appearing at the same briefing, added that “this system is a mobile system. You can shift it according to your threats, and that’s why Germany is buying the system that can be utilized according to its own requirements.”

There will also be training with engineers and also the air forces of Germany and Israel, according to Patel. “It’s a great challenge, and IAI is making the best efforts to educate the German operational forces in order to meet the system capabilities,” said Levy.