Rheinmetall and BAE Systems Establish U.K.-Based Land Systems Joint Venture

by J. Kasper Oestergaard, European Correspondent, Forecast International.

On January 21, 2019, Rheinmetall acquired a majority stake in BAE Systems’ Land UK business, creating a European market leader in the military vehicle sector.  Source: BAE Systems

British defense giant BAE Systems has sold a majority stake in its Land UK tank and combat vehicle division to German competitor Rheinmetall for GBP28.6 million. Subject to customary regulatory approvals anticipated to be completed in the first half of 2019, the deal creates a European market leader in the military vehicle sector.

According to BAE Systems, the Land UK operation has 400 employees and generates revenues of about GBP60 million a year. The deal will, however, not include Land UK’s munitions and technology interests. Rheinmetall will have a 55 percent stake in the new joint venture, with BAE Systems retaining 45 percent. The joint venture, named Rheinmetall BAE Systems Land (RBSL), will be based at BAE Systems’ facility in Telford, Shropshire.

RBSL will play a major role in the delivery of the British Army’s new Boxer 8×8 mechanized infantry vehicle (MIV). Rheinmetall and Krauss-Maffei Wegmann already lead the ARTEC consortium, which will build the Boxer MIV for the British Army. ARTEC also includes BAE. Furthermore, RBSL will likely upgrade and maintain the Challenger 2 tank. BAE Systems and Rheinmetall were, prior to this deal, competing against each other for the Challenger 2 contract. RBSL will also support the Trojan, Terrier, Warrior, military bridging, and AS90 self-propelled artillery system programs. Initially focused on U.K. programs, RBSL will also participate in and contribute to various new global military vehicle programs.

Global head of Rheinmetall’s Vehicle Systems division, Ben Hudson, stated, “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.” Managing director of BAE’s Land UK business, Jennifer Osbaldestin, commented, “Joining forces with Rheinmetall in the U.K. 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.”

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