Raytheon's $1.7 Billion Patriot Systems Deal with Spain

• Each Patriot battery costs over $1 billion ($400M for system, $690M for missiles), with individual interceptors priced at ~$4 million each
• Raytheon partnered with Spanish defense firms including Sener for component supply, integrating local suppliers into the global Patriot supply chain
• The systems are highly effective against aircraft and missiles but economically inefficient against cheap drones, presenting operational challenges

Raytheon Secures $1.7 Billion Spanish Patriot Defense Deal

RTX Corp's Raytheon Technologies has won a $1.7 billion contract to deliver four Patriot air and missile defense systems to Spain. The Patriot (Phased Array Tracking Radar for Intercept on Target) is a mobile surface-to-air missile system capable of detecting, tracking, and destroying incoming aircraft and missiles.

Key Financial Details:

• Total contract value: $1.7 billion
• Cost per new Patriot battery: Over $1 billion ($400 million for the system, $690 million for missiles)
• Individual Patriot interceptor cost: ~$4 million per missile

Strategic Partnerships:

Raytheon has collaborated with Spanish defense firms, including Sener, which will supply components such as the electro-mechanical control system for the GEM-T missile as part of the global Patriot supply chain.

Market Context:

The deal reflects growing European demand for air defense systems, with Germany, the Netherlands, and Romania placing Patriot orders earlier this year. The U.S. State Department also approved potential sales to sustain Ukraine's Patriot systems in November.

Operational Considerations:

While Patriot batteries are highly effective against missiles and aircraft, their use against cheaper drones presents cost-efficiency challenges given the high price per interceptor.

Market Implications:

This significant contract strengthens RTX's defense segment revenue and reinforces Patriot's position as a critical air defense solution for NATO allies. The deal underscores continued strong international demand for advanced missile defense capabilities amid heightened global security concerns, potentially benefiting other defense contractors in the sector.