Saab has signed a deal with ThyssenKrupp Industrial Solutions for the acquisition of its Swedish submarine business ThyssenKrupp Marine Systems (TKMS).

In addition to strengthening Saab’s status as a comprehensive supplier of military systems, the $50.5m deal will allow the company to manufacture submarines and stealth-technology corvettes, boosting its naval capabilities.

"Upon completion of the deal, TKMS will be integrated into Saab’s Security and Defence Solutions business unit."

The agreement is expected to be approved by ThyssenKrupp’s board and Swedish officials by the end of July, bringing an end to negotiations.

Saab president and CEO Hakan Buskhe said: "The knowledge that the employees possess for developing and producing submarines is unique and strengthens all of Saab."

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Upon completion of the deal, TKMS will be integrated into Saab’s Security and Defence Solutions business unit.

Saab Business Area Security and Defence Solutions head Gunilla Fransson said that the integration and development efforts will now begin to ensure that operations reach their full capacity.

"It is important to achieve synergies with Saab’s current naval business," Fransson said. "This process must be allowed to take its course, but at the same time we begin deliveries of development, maintenance and production work to the Swedish market."

TKMS, which has 900 employees, designs, builds and maintains naval systems, including submarines and surface vessels, while supplying systems and products to the navies of Sweden, Australia and Singapore.

TKMS also develops air independent propulsion (AIP) systems based on Stirling technology, submarine rescue vehicles and mine counter-measure systems.

Last month, Saab signed a $70m contract with the Swedish Defence Materiel Administration (FMV) to construct next-generation A26 submarines and provide mid-life updates to the Royal Swedish Navy’s two Gotland-class submarines.

Defence Technology