BAE Systems and Saudi Arabia agree on Eurofighter pricing.

Defence group BAE Systems has agreed pricing with Saudi Arabia over the rising cost of a long-running Eurofighter Typhoon jet deal. The remaining negociation was on the price of 42 out of a 72 Eurofighter Typhoon order.The 2007 deal to supply Saudi with 72 Eurofighters for $7.4 billion had to be renegotiated after Saudi asked for additional weaponry and equipment for the fleet.

Ian King, BAE's chief executive, said: "This is an equitable outcome for all parties. I am pleased that we have been able to conclude this negotiation which builds on our long-standing relationship with this much valued customer."

BAE warned last year that failure to agree a deal could hit earnings. Its shares rose 3% on Wednesday's news.

The new deal was negotiated mainly between the Saudi and UK governments. Now that this contract, known as the Salam programme, has been secured, talks are expected to begin with the Saudis about buying dozens more Eurofighters.