BAE Systems and Germany-based Rheinmetall have signed an agreement to create a joint UK-based military-vehicle design, manufacturing and support business.

This will be based at BAE Systems’ facility in Telford and will sustain over 400 jobs, while preserving keytechnology and engineering skills.

Rheinmetall (www.rheinmetall.com) will buy a 55% stake in BAE Systems’ existing combat-vehicles business, with the British company retaining 45%. The deal is subject to regulatory approvals that should be completed in the first half of 2019.

The joint venture will be known as Rheinmetall BAE Systems Land (RBSL). In addition to managing and expanding the existing combat-vehicle support business, the plan is for the joint venture to play a major role in the delivery of the British Army’s new Mechanised Infantry Vehicle (MIV) and other strategic combat-vehicles programme.

The combination of Rheinmetall’s military-vehicle technology and products with the additional capabilities and products brought to the joint venture by BAE Systems — such as Trojan, Terrier, Warrior, military bridging and the AS90 self-propelled artillery system — will create a European market leader in the military-vehicle sector.

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

While initially focused on these major UK programmes, RBSL will also form an integral part of Rheinmetall’s Vehicle Systems Division, so it will participate in and contribute to various global military-vehicle pursuits and contracts.

Jennifer Osbaldestin, BAE Systems Land UK business managing director (www.baesystems.com), said: “We are committed to evolving our combat-vehicle 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.”