The contract was estimated to be worth 12 billion francs($2.09 billion), an industry source said. The air-to-ground weapon accounted for around two thirds of the contract value, according to a government source.

Matra BAe Dynamics is a joint venture between Lagardere and British Aerospace. Revenues from the UAE contract will be shared equally between the parent companies, a Matra BAe spokesman said.

Confirmation of the missiles purchase follows last week's signing of a contract for 30 new Mirage 2000-9 combat jets built by Dassault Aviation and the upgrade of 33 Mirage 2000-5 planes which the UAE bought almost 20 years ago.

The missiles deal would allow Matra BAe Dynamics "to establish close cooperation with the United Arab Emirates for the next 20 years," Lagardere said in astatement.

The UAE purchase marks the first export sale of the infra-red model of the Mica, which complements an electromagnetic version which Abu Dhabi is also buying, it said.

The long-range strike missile, known by its Arabic name Black Shahine (or Black Shaheen in its French spelling), is based on the Apache and Scalp EG stand-off weapon being built for France and the Storm Shadow which will equip Britain's Royal Air Force. Shahine means falcon.

Matra BAe will also supply self-protection countermeasure packages in the UAE contract, with its Spirale electromagnetic decoy system and Eclair infra-red/electromagnetic decoy. Both are built into the airframe.

The Mirage aircraft will be equipped with an advanced RDY radar from Thomson-CSF and powered by engines built by state-owned Snecma.

Lagardere shares closed flat at 230 francs, while the market closed down 0.17 per cent.