An alliance formed by Germany’s ThyssenKrupp and Brazilian plane manufacturer Embraer SA inked a deal Thursday to deliver four frigates to Brazil’s navy between 2025 and 2028, the businesses stated in a statement.
The agreement inked in Rio de Janeiro is part of Brazil’s push to modernize its navy so it can patrol off-shore resources in the Atlantic, such as Brazil’s vast pre-salt oil reserves.
The businesses didn’t disclose the price tag. The Brazilian navy website stated the four-ship program will cost approximately $2 billion.
In 2019, the businesses had been chosen as the most popular suppliers for the contract to deliver four Tamandaré class corvettes; however, the original design was enlarged and the navy says they’re frigates.
The program is the first massive investment determined by the government of far-right Prez Jair Bolsonaro, who has boosted defense spending and appointed army officers to his Cabinet.
The ships will be constructed in Brazil, at the naval shipyard of Itajaí in Santa Catarina State, with local content rates above 30% for the first vessel and 40% for the others. ThyssenKrupp will supply technology.
A majority stake in TKMS, which has a business value of around 525 million euros ($587 million) in response to Credit Suisse estimates, could be sold in an ongoing restructuring process of the group, ThyssenKrupp stated.
TKMS is Germany’s second-largest defense company after Rheinmetall, which, along with France’s Naval Group, has been mentioned as a potential purchaser of the unit previously.