By Daniel Hunter

BAE Systems' shares fell by 5% following the collapse of a deal to supply fighter jets in the Middle East.

The UK's largest manufacturer were due to produce and deliver 60 Eurofighter Typhoon jets to the United Arab Emirates (UAE).

Following that news, there are also doubts over a deal with Saudi Arabia. According to reports, negotiations to extend a current deal have stalled.

BAE supplied Saudi Arabia with 72 Typhoon jets in 2007 for around £4.5bn. But there have been negotiations on an extension of that contract, with BAE upgrading the aircraft and supplying greater supporter and maintenance.

Despite the potential collapse of two deals, BAE said it did not factor the deals in its financial plans. The company said: "All parties have invested significant effort in drawing up Typhoon proposals for the UAE and, recognising the risk, scale and complexity of such a transaction, the group had not built this prospect into its planning assumptions"

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