The Greek Minister of Defence, CEO of Naval Group, and CEO of

MBDA signed a Memorandum of Understanding (MoU) on Sept. 28 to start negotiations to provide Greece’s Hellenic Navy with three Defence and Intervention Frigates (FDI HN).

The deal is set to cost about $3.5 billion.

Under the framework agreement, France’s Naval Group will build the frigates in Lorient, France, where the second similar frigate for France entered production. France has currently contracted Naval Group for five of the frigates before the MoU was signed.

MBDA will provide various equipment including the ASTER 30 B1 surface-to-air missiles and Exocet MM40 Block 3C missiles.

The companies noted the deal also includes an option for a possible fourth Greek frigate.

The MoU was signed by Greek Minister of Defence Nikólaos Panayotópoulos, CEO of Naval Group  Pierre Eric Pommellet, and CEO of MBDA Eric Béranger.

This agreement was announced the same day French President Emmanuel Macron and Greek Prime Minister Kyriakos Mitsotakis agreed to a new strategic partnership.

“This partnership contributed to European independence, to the strengthening of Europe’s sovereignty, and to international peace and security,” Macron said at a news conference

“Europe must be able to independently defend its own national, geographic and trans-Euroipean interests….without necessarily anticipating, if it deems it necessary, the contribution of NATO or the United Nations,” Mitsotakis added.

This agreement comes after Australia signaled a plan to cancel its agreement with Naval Group to replace its six Collins-class conventionally-powered attack submarines with 12 conventionally-powered vessels designed by Naval Group. Australia is now pursuing nuclear-powered submarines as it starts working with the U.S. and U.K. in the new AUKUS partnership. (Defense Daily, Sept. 15).

Lockheed Martin [LMT] was also competing for the Greek contract as the American offer with its Hellenic Future Frigate, derived from the Freedom-variant Littoral Combat Ship. The company also used this as the starting point for the Multimission Small Combatant under construction for Saudi Arabia.