Mahindra & Mahindra Ltd. and BAE Systems said yesterday in New Delhi they have signed an agreement to create a land systems focused, joint venture defense company based in India.
Approved by the Foreign Investment Promotion Board of the Government of India (GoI) earlier this year, the parent companies’ initial investment will be $21.25 million.
The company’s equity split will be 74 percent Mahindra and 26 percent BAE, in accordance with the current defense sector Foreign Direct Investment regulations of the GoI.
Further announcements are expected, to include the company name, senior leadership and when it becomes operational.
Anand Mahindra, vice chairman and managing director, Mahindra Group, said: “BAE Systems is the global number one land systems defense company and we couldn’t have a better partner for this venture. We are already working together and the benefits for all parties, including the Indian defense and security forces, are clear. We look forward to making a major contribution both to the security and economy of India.”
The $6.3 billion Mahindra Group is among the top 10 industrial houses in India.
Guy Griffiths, group managing director International, BAE, said: “The skills and knowledge of the two companies are an excellent fit, and the values and vision which we share will allow this venture to prosper and innovate. India recently became BAE Systems’ seventh home market; this new company is a central part of that strategy.”
The joint venture company, whose name is currently going through the official certification process, will be headquartered in New Delhi with manufacturing at a facility nearby in Faridabad.
Initially, there will be about 100 employees and existing projects include the Axe high mobility vehicle as well as up-armored and bulletproof Scorpios, Boleros, Rakshak, Rapid Intervention Vehicles and the Marksman light armored vehicle.
In anticipation of the new company, the two shareholders have been progressing on a major new project to develop a mine-protected vehicle specifically designed to meet the needs of the Indian armed and paramilitary forces.
The companies have worked in partnership to produce a prototype vehicle using the proven mine defeating technologies of the BAE South Africa RG series of vehicles and Mahindra’s expert knowledge of Indian requirements and conditions.
This development process has resulted in a brand new mine protected vehicle currently named Mine Protected Vehicle India (MPVI). A prototype MPVI has been produced and will eventually be manufactured at the JV facility in Faridabad using indigenously produced materials.
Plans also intend for the joint venture to be involved in a number of future artillery programs including the M777 lightweight howitzer and the FH77B 155mm howitzer. It is envisaged that the JV will become a center of excellence for the Indian artillery program.