Rheinmetall to take majority stake in BAE Systems’ UK vehicle business

21 January 2019

Rheinmetall has taken a stake in BAE Systems' UK-based combat vehicle business, which will play a key role in delivering the Boxer vehicle for the UK's MIV programme. Source: IHS Markit/Patrick Allen

Rheinmetall and BAE Systems signed an agreement on 21 January that will lead to the establishment of a joint venture (JV) through which the German manufacturer will take on a majority stake in BAE Systems' UK-based combat vehicles business.

BAE will retain a 45% holding in its Telford-based land-systems business line, while transferring 55% to Rheinmetall under the newly formed Rheinmetall BAE Systems Land (RBSL) JV.

The two companies typically compete with each other in European and international land tenders, so this merger is a significant move by both to form one entity through which they will target these continuing requirements.

One particular area of interest for RBSL will be the British Army's Mechanised Infantry Vehicle (MIV) acquisition, further guaranteeing British workshare in the programmes that is being fulfilled by the Boxer 8×8, a vehicle developed by the ARTEC consortium that is owned by Rheinmetall and Krauss-Maffei Wegman.

The UK was originally involved in the Boxer development before it decided in 2004 to leave to focus on its Future Rapid Effect System project that has since manifested into the MIV requirement.

Ahead of the April 2018 decision to rejoin the Boxer programme, ARTEC had already committed in February 2018 to teaming with several British companies on the programme, including BAE Systems, Pearson Engineering, and Thales UK, guaranteeing that 100% of the final assembly of the vehicle would take place in the UK.

Rheinmetall has additionally committed to establishing a production and integration centre for armoured vehicles in the UK in support of the programme.

The UK's MIV acquisition is expected to be worth about GBP3 billion (USD3.9 billion) and will see several hundred vehicles purchased to help form two new strike brigades alongside the Ajax scout vehicles being developed by General Dynamics.

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