BAE Systems wins £20bn Australian warships contract


British defence giant BAE Systems has won a 35 billion Australian dollar (£20 billion) contract to build a new fleet of warships for Australia.

BAE will build nine Type 26 submarine hunter ships for the Royal Australian Navy under the terms of a 30-year contract.

The group saw off competition from Spain's Navantia and Italian firm Fincantieri to win the deal, which is part of a 200 billion Australian dollar spending programme by Canberra.

UK ministers are expected to trumpet the decision as a coup for Brexit Britain when an official government announcement is made, although the ships will be built in Australia.

It will come as welcome relief to Theresa May, who has had to deal recently with a public hammering from Airbus, BMW and business groups over her party's handling of Brexit.

Foreign Secretary Boris Johnson has also been in the headlines for having said to have exclaimed "f*** business" when asked about the Brexit fears of company bosses.

Theresa May
Theresa May

Shares in BAE were up over 1% following the news.

BAE did not respond to requests for comment.

Australian prime minister Malcolm Turnbull is expected to confirm the deal on Friday.

The deal is the second major coup for BAE after the defence giant bagged a 198 million US dollar (£150 million) tank contract with the US Marine Corps last week.

The deal will see BAE deliver an initial 30 "amphibious combat vehicles" with options for a total of 204 tanks, which could be worth up to 1.2 billion US dollars (£909 million).

Earlier this year, it was announced that the UK Government will stump up £900 million for BAE to press ahead with the second phase of construction for four nuclear-armed Dreadnought submarines.