The partnership could signal a huge opportunity for Australian businesses seeking to contribute to both the UK's Boxer Vehicle Program, and possibly the LAND 400 program in Australia.
The joint venture announced will be headquartered at BAE Systems' Telford facility in England, and is estimated to sustain over 400 jobs across the UK, as well as "preserve key technology and engineering skills".
“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," Jennifer Osbaldestin, managing director of BAE Systems Land UK business said.
"We look forward to working together to ensure the joint venture is a trusted supplier to the British Army and our international customers.”
Rheinmetall will purchase a 55 per cent stake in the existing BAE Systems UK-based combat vehicles business, with BAE Systems retaining 45 per cent .
“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," Ben Hudson, global head of Rheinmetall’s vehicle systems division, said.
"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.”
The establishment of the joint venture is subject to regulatory approvals that are anticipated to be completed in the first half of 2019.
The joint venture will be known as Rheinmetall BAE Systems Land (RBSL) when the approvals are completed.
The two companies confirmed that the joint venture aims to "play a major role in the delivery of the British Army’s new Mechanised Infantry Vehicle (MIV) and other strategic combat vehicles programs", as well as "managing and growing the existing combat vehicle support business".