Middle East war a boon for UAE defense giant with global ambitions

In the heart of the Abu Dhabi desert, workers toil inside warehouses assembling drones and missiles for the UAE’s Edge group, riding high on a wave of new demand for its weapons battle-tested by the Middle East war.

Throughout six months of US-Iran conflict, nearly 3,000 missiles and drones targeted the UAE, denting its image as a safe haven but providing a windfall for Abu Dhabi-owned EDGE, which is embarking on a major European expansion, executives said.

“Before the war, we only had a handful of products that we could say were battle proven. After the war, we can say a lot of products are now battle proven,” Khaled Al Zaabi, a top EDGE executive said that from their Abu Dhabi headquarters.

In just a few years, the group providing weaponry for the UAE armed forces has become the foremost Arab defense firm, and now mostly relies on exports for revenue.

That battle-proven stamp was “the absolute selling point,” Zaabi said, noting “magnitudes more” demand after the war, though he declined to give specific figures.

Founded in 2019 by combining UAE defense companies, EDGE employs 19,000 people and produces everything from drones to missiles, armored vehicles, AI-powered technology and naval vessels.

‘One of the largest’

Miles Chambers, EDGE senior vice president of international business, said the group was already seeing soaring demand from the region.

Albert Vidal, a research associate at the International Institute for Strategic Studies, expects Gulf countries to increase defense spending, especially on air defense.

EDGE’s solutions in that domain were still under development when the war began, he said, though he expects “significant acquisitions” after their release.

This includes SkyKnight, a short-range air defense system, scheduled for a 2028 release. The acting CEO of Halcon, the EDGE company producing it, hopes to release it sooner by developing it in phases.

“Us and EDGE are currently focused on developing air defense systems, specifically countering saturation of drone attacks,” Saeed Al Shamsi said.

The UAE remains reliant on advanced US air defense including pricey Patriots and THAAD systems. Since the war began, the UAE spent upwards of $8 billion on US weapons.

“You don’t need to counter every threat with a Patriot missile. You can counter Shaheds and these kinds of drones with much cheaper drones,” Zaabi said.

The UAE stopped most of Iran’s attacks. In May, EDGE chairman and presidential adviser Faisal Al Bannai said 85 percent of drone interceptions were made using locally-produced jammers.

Vidal said those figures were difficult to independently verify.

Having absorbed the bulk of Iran’s wrath in the early weeks of the war, the UAE seeks to accelerate the development of locally-made air defense systems, drones and jammers.

In Abu Dhabi’s Tawazun Industrial Park, EDGE’s ambition was on full display.

Michael Deshaies, the CEO of EPI, an EDGE company that manufactures components for commercial planes and the defense sector, said the group hoped to become “one of the largest” manufacturers of micro-jet engines.

Standing near a construction site outside their main facility, he said they were building a 5,600 square meter site to produce micro-jet engines for autonomous vehicles.

The new facility will “be more defense related, less commercial related,” Deshaies said.

Europe expansion

The group has not been without controversy.

Amnesty International said EDGE armored vehicles equipped with French weapons had been used by Sudan’s paramilitaries, but the group has denied selling weapons used in Sudan. The UAE denies widespread reports, including by UN experts, that it backs the paramilitaries.

The allegations have moreover not hindered the group’s expansion. Beyond the UAE, EDGE’s international strategy relies on acquiring defense firms or purchasing majority stakes — along with their market shares. Last year, exports totaled 70 percent of its $5 billion sales.

After focusing mostly on the Global South, including half a billion dollars invested in Brazil, EDGE in June set up its Europe headquarters in Paris.

It hopes to leverage its “battle-tested” stamp for a bigger share of Western markets, amid a surge in demand due to the Russia-Ukraine war and US pressure on NATO countries to increase defense spending.

The group has purchased major stakes, made acquisitions and announced joint ventures in defense companies across Europe.

In France, it plans to open an engine production company and drone factory.

EDGE “plans to produce in Europe and sell its products as ‘locally made,’ while also leveraging the networks of the companies it has acquired,” Vidal said.

European military spending has been ballooning for over a decade and is now more than three times that of Latin America, Africa and South Asia combined, Vidal said.

“If EDGE wants to become a top 10 defense company globally, they will struggle to get there if they are not selling to Western/NATO countries,” Vidal.