BAE wins $1bn upgrade contract for South Korea F-16 jets

British defence giant BAE said the exact value of the project was still being negotiated but that it is expected to be worth in excess of $1bn, the lion's share of which will go to Europe's largest defence contractor.

"This is a strategic international win for us, significantly expanding our aircraft upgrade and modification business," said Dave Herr, president of BAE Systems Support Solutions.

BAE Systems beat US defence group Lockheed Martin in the competition for the contract to upgrade the jets, which are a variant of Lockheed's F-16 built by Korea Aerospace Industries.

Under the terms of the deal, BAE will install new computers and operating systems in the jets along with other work.

The work will be performed primarily at BAE Systems' facilities in Fort Walton Beach, Florida; San Antonio, Texas; and Warner Robins, Georgia.

Work will also be conducted at the company's aviation hangers in Mojave, California and Crestview, Florida.