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UK competition watchdog ends probe into BAE Systems deal

By James Pugh | Telford | Business | Published:

The proposed joint venture between UK defence company BAE Systems and German firm Rheinmetall to manufacture military vehicles has been approved by the UK Competition and Markets Authority.

BAE Systems in Telford

The venture will be known as Rheinmetall BAE Systems Land (RBSL) and will be headquartered at BAE Systems’ facility in Telford.

The company will manufacture the British Army's new 8x8 wheeled Mechanised Infantry Vehicle, upgrade the Challenger 2 Main Battle Tank fleet and will take part in other strategic combat vehicles programmes.

The CMA was investigating whether the joint venture will lead to a "substantial lessening of competition" in the UK.

In January, Rheinmetall announced it will purchase a 55 per cent stake in the existing BAE Systems UK based combat vehicles business, with BAE systems retaining 45 per cent.

A statement from BAE Systems said: “BAE Systems welcomes the decision by the regulator to approve the proposed formation of a new UK-based joint venture business for military vehicle manufacture and support.

"Once formally established in the coming weeks, the new company will be able to better serve our customers’ future interests, including manufacture of the British Army’s new Boxer infantry vehicles.”

Ben Hudson, global head of Rheinmetall’s vehicle systems division, said: “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.”

BAE Systems’s UK combat vehicles manufacturing and support business helps the Ministry of Defence and British Army maintain and upgrade military vehicles.

It generates revenue of about £60 million a year and employs about 400 people largely based in Telford, as well as at sites in Washington, Filton and Bovington.

James Pugh

By James Pugh
@JamesP_Star

Shropshire Star Business and Farming Editor.

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