German, French tank makers seal armoured vehicles tie-up
PARIS (Reuters) - French and German armoured vehicle makers Nexter and KMW are to seal their long-planned merger on Wednesday, the French defence ministry said, combining the Leclerc and Leopard tank brands to compete with the U.S.-made Abrams and Britain's Challenger.
French state-controlled Nexter Systems and privately-held Krauss-Maffei Wegmann GmbH & Co KG of Germany have been in exclusive tie-up talks for more than a year.
One apparent sticking point had been the reported preference of German vice-chancellor Sigmar Gabriel for an all-German merger of KMW with automotive and defence group Rheinmetall designed to save jobs.
Another was the need for a change to French law to accommodate the deal, which took effect on July 9.
The merged company will be 50 percent owned by the French government through GIAT Industries and 50 percent by the Bode-Wegmann family, which owns KMW, according to a government document explaining the recent law change.
The document also says the law change allows for the privatisation of GIAT Industries but would guarantee the jobs of Nexter employees.
"Nexter Systems and KMW will benefit from each other's commercial clout," the document said, citing complementary products and the potential for research and development cooperation.
KMW and Nexter each employ over 3,000 people worldwide. KMW supplies wheeled and tracked fighting vehicles to 30 nations while Nexter is a maker of systems, ammunition and equipment with sales of 1.05 billion euros last year.
Western competitors on world military hardware markets include Britian's BAE Systems , maker of the Challenger tank and General Dynamics of the United States which makes the Abrams.
(Reporting by Andrew Callus and Yann Leguernigou in Paris and Arno Schuetze in Frankfurt, editing by Louise Heavens)
