UK’s BAE Systems to divest 55% stake in combat vehicles unit for $36.8 mln

British defense, security, and aerospace company BAE Systems plans to divest a majority stake in its combat vehicles unit for 28.6 million pounds ($36.8 million).

The company is divesting the stake to German defense contractor Rheinmetall AG. The transaction is part of a broader agreement with Rheinmetall to create a joint venture (JV) to design, develop and support military vehicles that will sustain over 400 jobs in the UK.

Rheinmetall will buy a 55 percent stake in the JV and BAE Systems will retain the rest. The new JV, Rheinmetall BAE Systems Land (RBSL), will help BAE deliver the British Army's new mechanized infantry vehicle and other combat automobile programmes.

Rheinmetall BAE Systems will form part of Rheinmetall's vehicle systems division and contribute to the company's global military contracts. RBSL is subject to regulatory recommendations and is expected to finalize in the first half of this year.