Germans take over tank and combat vehicle business

Defence giant BAE Systems has sold a majority stake in its Land UK tank and combat vehicle division to a German rival in a deal that will sustain more than 400 jobs in the West Midlands.

Rheinmetall and BAE Systems have sealed a £28.6m deal to create a joint UK-based military vehicle design, manufacturing and support business, which will be headquartered at BAE Systems’ facility in Telford.

Rheinmetall will purchase a 55% stake in the existing BAE Systems UK-based combat vehicles business, with BAE Systems retaining 45%.

The venture is subject to regulatory approvals which are anticipated to be completed in the first half of 2019.

Known as Rheinmetall BAE Systems Land (RBSL), the business will play a major role in the delivery of the British Army’s new Mechanised Infantry Vehicle (MIV) and other strategic combat vehicles programmes.

RBSL will have the potential to create hundreds of additional UK jobs, both in Telford and the wider supply chain, the companies said.

Ben Hudson, global head of Rheinmetall’s vehicle systems division, said: “We are excited about the potential the new joint venture holds for Rheinmetall, BAE Systems and ultimately our customers. 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.”

Jennifer Osbaldestin, managing director of BAE Systems Land UK business, added: “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.”

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