The recently announced $140 billion Saudi-US arms deal is more than a headline-grabbing transaction.It underscores a broader shift: Gulf countries, particularly Saudi Arabia, are serious about building modern, capable defense systems at scale. They are no longer passive buyers in the global arms market.With significant capital and accelerating industrial ambitions, they are positioning themselves as emerging players in the global defense ecosystem.Europe Needs New Industrial PartnersNowhere is this shift more relevant than in Europe. Faced with urgent demands to boost defense production, but constrained by budgets and limited industrial capacity, European nations would benefit from deeper industrial ties with the Gulf.These partnerships should go beyond traditional buyer-seller dynamics. For Gulf states, it’s a once-in-a-generation opportunity to build a sustainable, sovereign defense industry. For Europe, it’s a chance to secure investment, expand production, and strengthen strategic resilience.155-millimeter artillery ammunition is manufactured at Rheinmetall. Photo: Axel Heimken/AFPGulf states have already taken steps to localize their defense industries, pursuing technology transfer and setting ambitious targets for domestic production. But to accelerate progress, they need to reframe how they partner with Europe — not just as clients, but as co-investors and co-developers.That new model should rest on three pillars.Partnership, Not Just OwnershipFirst, Gulf countries should seek structured government-to-government agreements that enable co-investment in major multinational defense programs, such as next-generation tanks, aircraft, or integrated air defense systems.The goal should be long-term industrial partnership with Europe’s top-tier original equipment manufacturers (OEMs), not merely acquiring equity.Buy Into European R&DSecond, rather than building research and design capabilities from scratch, Gulf nations should purchase and integrate into existing European research and development (R&D) programs.This allows them to rapidly field technologies tailored to their mission profiles while simultaneously developing local design expertise.Over time, this model shortens the learning curve and boosts regional innovation. Invest in the Supply ChainThird, there is significant opportunity to support second- and third-tier suppliers within European defense supply chains.These smaller firms often drive innovation, including in dual-use technologies, and are less politically sensitive than direct OEM investments. Gulf capital can help these companies scale, and in some cases, relocate production to the region, strengthening local industrial capacity.How Gulf Governments Can Make It WorkTo make these partnerships work, Gulf governments need to take a coordinated, strategic approach.They should adopt a whole-of-government model to align defense ministries, investment arms, and foreign affairs bodies in shaping and executing industrial agreements.Public-private collaboration is also essential, enabling regional contractors to gain international exposure and drive ecosystem growth.Crucially, Gulf countries must prioritize access to intellectual property (IP) — an essential ingredient for industrial sovereignty. While some traditional suppliers restrict IP transfers, many European firms are more open to negotiated sharing arrangements.Saudi Crown Prince Mohammed bin Salman in Riyadh, Saudi Arabia, 2018. Photo: AFPWindow of Strategic OpportunityThere are challenges, of course. European firms and regulators may be cautious about foreign capital entering strategic sectors.Gulf investors will need to offer more than money; they must bring credible industrial plans, transparent governance, and long-term commitments.Still, the window is open. Europe is actively seeking funding and capacity. If Gulf countries act decisively, they can help shape the future of global defense production — while securing their own place in it.This is more than a transaction. It’s a chance to build the foundation of a new industrial alliance.Haroon Sheikh is a Senior Executive Advisor with Strategy& and the leader of the firm’s Aerospace, space and defence practice in the Middle East.Ritesh Verma is Principal with Strategy& Middle East, part of the PwC network.The views and opinions expressed here are those of the author and do not necessarily reflect the editorial position of The Defense Post.The Defense Post aims to publish a wide range of high-quality opinion and analysis from a diverse array of people – do you want to send us yours? Click here to submit an op-ed.The post The Gulf’s Defense Opportunity in Europe appeared first on The Defense Post.