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France-Germany

Franco-German merger to be the 'Airbus' of tank manufacturing

French troops patrol in an armored vehicle in Bangui, Central African Republic, December 6, 2013.
French troops patrol in an armored vehicle in Bangui, Central African Republic, December 6, 2013. Reuters/Emmanuel Braun

French and German tank producers have teamed up to stay competitive in the international market. The agreement signed between France's Nexter and Germany's KMW on Wednesday, comes after 10 years of negotiations between the companies CEOs.

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"This joint enterprise aims to be the 'Airbus' of military land weaponry and will have an estimated sales revenue of 2 billion euros and a personnel of 6,000 people," Doctor Michael Brzoska, a researcher at the University of Hamburg, and expert on the German arms industry, told RFI's Gilda Di Carli.

This future entity, which does not yet have an official name because until now it was referred to as Newco, will produce armoured vehicles, ammunition, canons and other heavy artillery.

It will take fourth place in arms manufacturing behind the American General Dynamics, British BAE Systems, and American Oshkosh Defense.

However, the alliance has been widely criticized in Germany, which fears it will lose control of its "made in Germany" trademark.

Germany is the third largest arms export country in the world, but it is losing ground.

The government was pressured into adopting more restrictive arms export legislation during the 2013 federal elections, after it was criticized for exporting to countries in the Middle East.

Therefore, the merger with France will open the possibility of exporting to an otherwise sensitive market, Brzoska told RFI.

Germans are worried about the "transfer of jobs to France," as the industry moves its facilities there.

The company's headquarters will be based in the Netherlands, a neutral country between France and Germany.

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