European missile maker MBDA enters into a JV with Lockheed Martin Corp for new air/missile defense system

The new defense system is aimed at replacing the U.S. patriot air defense system.

The German arm of MBDA, a European missiles maker, has formed a joint venture with Lockheed Martin Corp, to create a new air and missile defense system, said the German military on Thursday.

In the 60-40 MBDA-led venture, the European missiles maker will act as the prime contractor for the new multi-billion-dollar TLVS system, which both companies have been negotiating since 2015.

The TLVS systems aims to replace the U.S. Patriot air defense system.

As per Dietmar Thelen, the top MBDA executive in the venture, the joint venture is the next natural step; he however clarified that this does not necessarily mean it will result in a contract.

“We’re getting closer every day,” said Thelen.

In 2015, Germany’s defense minister had stated it preferred the Medium Extended Air Defence System (MEADS), which was developed with $4 billion in funding from Germany, Italy and the U.S. over Raytheon Co’s Patriot system.

Despite this leaning, both sides have struggled to work out the terms and details of the program since 2015.

Negotiations became complicated in the wake of new procurement guidelines which brought in greater transparency and is aimed at reducing technical delays and cost overruns that are endemic to such big projects.

“This formal registration of the joint venture is intended to provide that capability to act as a single prime contractor to ensure that our German customer receives the most advanced system in the world,” said Gregory Kee who will lead the venture from the Lockheed side.

He went on to add, “We continue to support the process and are responding to the government’s requirements. We respect that process. Until that process is complete, we can’t talk about the price or the timetable,” said Kee.

While the TLVS program was initially slated to cost around $4.96 billion (4 billion euros) sources familiar with the proposal opine the final cost is likely to be several billion euros more.

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