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Italy's Leonardo and Franco-German KNDS to create tank alliance

Reuters
·2-min read

MUNICH/ROME (Reuters) - Italy's defence and aerospace group Leonardo and Franco-German consortium KMW+Nexter Defence Systems (KNDS) on Wednesday announced a "strategic alliance" to build a new generation of tanks.

"The aim is to create a truly European Defense Group and, in addition, to cooperate more closely in the field of land based electronics," the two companies said in a joint statement.

Leonardo and KNDS will work on "developing the future generation of armored vehicle platforms, including Main Ground Combat System (MGCS)," the statement said.

A source involved in the talks told Reuters that a letter of intent establishing a joint venture was signed at Italy's defence ministry, adding the collaboration "could range from a loose cooperation to the integration of the military part of Leonardo into KNDS".

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Another source with knowledge of the matter told Reuters last month that Italy would not have more than 20% of any joint venture that could be set up to build a new generation of European tanks.

Leonardo and KNDS said they also signed an agreement to jointly develop, manufacture and maintain tanks for the Italian army based on the current German Leopard 2 model. Reuters reported in July that Italy was planning to buy 125 Leopard 2 tanks.

German magazine Spiegel was first to report on the new alliance, indicating it would manage armament contracts worth almost 50 billion euros ($54 billion) and would involve establishing a new production site for the Leopard in Italy.

In their statement, Leonardo and KNDS confirmed that they aim "to create further production and development capabilities in Italy and to use these for future European and export projects."

The Italian defence ministry declined to comment on the Spiegel report.

In November, Leonardo CEO Roberto Cingolani said his company wanted to focus on European alliances and create regional "giants", and indicated it was in advanced talks to join Germany's Leopard tank programme. ($1 = 0.9267 euros)

(Reporting by Angelo Amante, Giulia Segreti, Alvise Armellini, Stephanie Hamel and Alexander Huebner. Writing by Nette Nöstlinger; Editing by Madeline Chambers/Keith Weir)