BAE Systems signs £623m armored vehicle deal

BAE Systems has secured a multi-million pound contract to supply hundreds of armored vehicles to the Swedish, German and British Armed Forces.

The deal comes as European nations pour billions into their defense budgets amid the war in Ukraine.

The FTSE 100 defense giant will make 436 of its BvS10 all-terrain vehicles available to support the three nations’ operations in the Arctic. The deal is priced at £623m.

Hard Core: The vehicles will contribute in support of operations in the Arctic

The BvS10 is a tracked vehicle designed to operate in harsh and remote environments such as snow, ice, sand and swamps, and can be equipped with various weapons such as mortars and missiles.

The Ministry of Defense will receive 60, with deliveries due to begin in 2024, while 236 will go to the Swedish Defense Agency and 140 to the Federal Ministry of Defense in Germany.

Deliveries of the vehicles include variants of the BvS10 equipped for various uses, including troop transport, medical evacuation, and command and control.

Tommy Gustafsson-Rask, managing director of BAE Systems Hagglunds, which makes the BvS10 at a factory in the Swedish town of Ornskoldsvik, said he’s seeing “increasing interest” in the vehicle – as well as its unarmored sister, the Beowulf – from several countries.

“Sweden, Germany and the UK will enjoy excellent returns on their investments in these high-performance vehicles for decades to come,” he added.

In addition to the three client nations, the BvS10 is also used by Austria, the Netherlands and France. Sweden bought 127 BvS10s last year and are set to buy a further 40 for £41m in a separate order.

The vehicles will be used by the Royal Marines, which were deployed to Afghanistan in 2006 when they relieved the Parachute Regiment in Helmand Province.

Brigadier Mark Totten, Deputy Director of Procurement for the Navy, said: “This is a unique capability – essential for command forces that are experts at operating in extremely cold weather.

“The vehicle has a number of attributes that make it perfect – it’s snow adept, has amphibious buoyancy, and protects its occupants from multiple threats.”

Demand for BAE’s products has surged this year as the Russian invasion of Ukraine prompted nations to increase defense spending and reassess security needs.

The BvS10 order comes as Sweden and its neighbor Finland, which borders Russia, negotiate to join NATO, the defensive alliance formed in the early days of the Cold War.

Last month, BAE Chief Executive Charles Woodburn said the company was expecting a “very strong” order year and that the outbreak of war in Eastern Europe had “shown more than ever” the need for strong security.

The UK earlier this year signed a contract with the company to build five Type 26 submarine-hunting frigates for the Royal Navy. The agreement will support shipbuilding assets in Scotland into the 2030s and support more than 4,000 UK jobs.

Other contracts the company has signed include supplying infrared heat-seeking technology for a missile defense system for American defense giant Lockheed Martin, and supplying Beowulf vehicles to the US Army.