German manufacturer Rheinmetall is set to hold a majority stake in
BAE Systems’ U.K. military vehicle business pending approval of a new joint venture, the two companies said Monday.
The new joint venture, known as Rheinmetall BAE Systems Land (RBSL), will remain based out of the U.K. company’s Telford, England facility. Rheinmetall will own 55 percent of the group, with BAE Systems holding the remaining 45 percent.
“The combined capabilities of our two great companies will offer our customers a comprehensive portfolio of military vehicles and associated technologies both now and into the future. We are proud to invest in the UK and expect to substantially grow the current business and the Telford manufacturing facility over the coming years,” Ben Hudson, global head of Rheinmetall’s vehicle systems division, said in a statement.
RBSL arrives as BAE Systems was readying for participation in Britain’s Mechanized Infantry Vehicle program.
The two companies are now expected to combine their MIV development efforts, as well as focus on the U.K.’s Trojan, Terrier, Warrior vehicles.
Rheinmetall and BAE Systems are also the two contenders for Britain’s program to upgrade its Challenger 2 tanks.
“We are committed to evolving our combat vehicles business so that we better serve our customers’ future interests. Joining forces with Rheinmetall in the UK provides renewed purpose for our vehicles business and allows us to deliver products, services and technology that help land forces excel in their vital roles. We look forward to working together to ensure the joint venture is a trusted supplier to the British Army and our international customers,” Jennifer Osbaldestin, managing director of BAE Systems’ Land UK business, said in a statement.
Both companies indicated the joint venture will turn its sights to global vehicle opportunities in due time, while noting RBSL will have no impact on either company’s current major work in the U.S., Sweden or Turkey.
“While initially focused on these major UK programs, RBSL will also form an integral part of Rheinmetall’s Vehicle Systems Division and will participate in and contribute to various global military vehicle pursuits and contracts,” Rheinmetall officials wrote in a statement.
The two companies may face potential competition for the U.S. Army’s impending program to replace its Bradleys with the Optionally Manned Fighting Vehicle (Defense Daily, Oct. 2018). BAE Systems is looking to offer its CV90, while Rheinmetall has teamed with Raytheon [RTN] on the Lynx fighting vehicle.