German Der Spiegel magazine said on Friday (May 25, 2018) that Saudi Crown Prince Mohammed bin Salman has ordered that no government contracts be awarded to German companies anymore, signaling continued anger over Berlin's foreign policy in the Middle East.
The magazine, which didn’t report any sources, said the move would probably hurt major companies such as Siemens, Bayer, Burger Engelheim and Daimler.
Relations between Germany and Saudi Arabia have been strained.
Last year, the kingdom summoned its ambassador to Germany for consultations after German Foreign Minister Ziegmar Gabriel's comments on the political crisis in Lebanon.
Saudi Arabia is a major trading partner of Germany, with imports worth 6.6 billion Euros ($ 7.7 billion) in 2017, according to the German Statistics Office.
Last year, Siemens won a $ 400 million order to hand over five gas turbines to a double steam and power plant being built in the kingdom.
A short time later, Daimler received an order from the Saudi mass transit company (SAPTCO) to buy 600 Mercedes-Benz Citaro buses.
A senior German businessman in Saudi Arabia, who asked not to be identified, told Reuters on Friday that the healthcare sector in particular was now more scrutinized when applying for Saudi bids.
«They are asking: Where will the products come from?
Are they manufactured in Germany?
Do you have other manufacturing sites?
Once this is German-made, they reject any German requests for tenders».
Bayer, Boringer and Siemens declined to comment on Der Spiegel's report.
Daimler said that they didn’t confirm the report and their work was continuing.
A Saudi government information office didn’t respond to a request for comment.
Bloomberg news agency reported in March that government agencies had been informed of non-renewal of some unnecessary contracts with German companies.
At the time, Bloomberg quoted sources as saying that Deutsche Bank's mandates in the kingdom were among the most vulnerable activities, including a potential role in Saudi Aramco's initial public offering, which could be the biggest sell-off ever.