BAE Systems strikes £623m armoured vehicle deal

BAE Systems has secured a multi-million-pound deal to supply hundreds of armoured vehicles to the Swedish, German and British armed forces. 

The agreement comes as European nations are pouring billions into their defence budgets amid war in the Ukraine. 

The FTSE 100 defence giant will provide 436 of its BvS10 all-terrain vehicles to help support operations carried out by the three nations in the Arctic. The deal carries a price tag of £623m. 

Hard core: The vehicles will help support operations carried out in the Arctic

The BvS10 is a caterpillar track-mounted vehicle designed to operate in harsh and remote environments including snow, ice, sand and swamps and can be kitted out with various weapons including mortars and missiles. 

The Ministry of Defence will receive 60, deliveries of which are due to start in 2024, while 236 will go to the Swedish Defence Materiel Administration and 140 will be sent to the Federal Ministry of Defence in Germany. 

The shipments of the vehicles will include variants of the BvS10 fitted for different uses including troop transport, medical evacuations as well as command and control. 

Tommy Gustafsson-Rask, managing director of BAE Systems Hagglunds, which manufactures the BvS10 at a factory in the Swedish town of Ornskoldsvik, said that it was seeing ‘increased interest’ in the vehicle – as well as its unarmoured sister, the Beowulf – from multiple countries. 

‘Sweden, Germany, and the United Kingdom will be getting an excellent return on their investment in these highly capable vehicles for decades to come,’ he added. 

Aside from the three nations placing the order, the BvS10 is also used by Austria, the Netherlands and France. Sweden purchased 127 BvS10s last year and in a separate order is due to buy an additional 40 for £41m. 

The vehicles are used by the Royal Marines, being deployed in Afghanistan in 2006, when they relieved the Parachute Regiment in Helmand province. 

Brigadier Mark Totten, Navy deputy director acquisition, said: ‘This is a unique capability – fundamental for Commando Forces that are expert in operating in the extreme cold weather.

‘The vehicle boasts a number of characteristics that make it perfect – it is adept over snow, has amphibious swimming capability and protects its occupants from several threats.’ 

Demand for BAE’s products has soared this year as the Russian invasion of Ukraine caused nations to increase defence spending and reassess security needs. The BvS10 order comes as Sweden and its neighbour Finland, which shares a border with Russia, undertake negotiations to join Nato, the defence alliance established in the early days of the Cold War. Last month BAE’s chief executive Charles Woodburn said the firm expected a ‘very strong’ year of orders and that the outbreak of war in Eastern Europe had demonstrated ‘more than ever’ the need for strong security. 

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

Other deals the company has signed include supplying infrared heat-seeking technology for an anti-missile defence system made by American defence giant Lockheed Martin as well as providing Beowulf vehicles to the US Army.