In a concrete demonstration of bilateral military cooperation, the U.S. Department of Defense announced Thursday that it has awarded a firm-fixed-price contract worth $343.6 million to German defense firm RAMSYS GmbH. The contract calls for RAMSYS to supply "445 Block 2 MK-44 Mod 4 Rolling Airframe Missile (RAM) Guided Missile Round Pack (GMRP) All-Up-Rounds (AURs)."
That's quite a mouthful, and probably requires some explaining. RAMSYS, aka RAM System GmbH, is a Raytheon (NYSE:RTN) partner and a joint venture among three European defense firms: privately held Diehl Stiftung owns 25% of RAMSYS, its subsidiary Diehl BGT Defence owns a further 25%, and MBDA Holdings -- itself owned by BAE Systems (NASDAQOTH:BAESY), EADS (NASDAQOTH:EADSY), and Finmeccanica (NASDAQOTH:FINMY) -- owns the remaining 50% of RAMSYS.
RAMSYS's near-sole raison d'etre is to build Rolling Airframe Missiles -- the "RAM" in RAMSYS -- for Europe's militaries.
As for the RAM itself, this is an anti-aircraft and anti-cruise missile defense system used on multiple ship platforms in Europe, and was co-developed, and is co-produced, by the U.S. and German governments. The RAM got its name because the surface-to-air missiles that it fires tend to spin or "roll" while in flight. The system is currently in service on about 78 U.S. Navy warships, and aboard 30 German vessels, and the Navies of South Korea, Egypt, Greece, Japan, Turkey, and the UAE are all considering, or have already begun adopting, the RAM, as well.
The Pentagon contract awarded Thursday is expected to be completed by January 2019, and will be 100% paid for by the German government.
Fool contributor Rich Smith has no position in any stocks mentioned. The Motley Fool owns shares of Raytheon Company. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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