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BAE Systems Lands $4.9 Billion Ship Sale to U.K.

Jul 02, 2017

British multinational defense company BAE Systems has been awarded a 3.7 billion pound ($4.9 billion) contract by the U.K. Ministry of Defense to provide three Type 26 Frigates. Described by BAE as “the most advanced ship in its class,” the Type 26 will accompany aircraft carriers and nuclear submarines to defend them against hostile subs, as well as operating on its own in combat or humanitarian roles.

The three ships are the first of eight anti-sub ships called for in the U.K.’s 2015 defense plan. They will be built in Scotland, where, according to BAE, production is already underway.

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The deal comes after extended negotiations between BAE and Britain’s Ministry of Defense, which has faced a serious budget crunch in recent years. That has been exacerbated by the continued decline of the value of the pound against the dollar, which has raised the effective cost of weapons Britain buys from U.S. providers such as Lockheed-Martin.

According to Defense News, BAE’s Type 26 could be considered for upcoming contracts with the Australian and Canadian navies. Industry sources said the U.K. contract could increase other buyers’ confidence in BAE's program.

Delivery of the ships is scheduled for the mid-2020s.

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