Defense contractors Rheinmetall of Germany and BAE Systems of Britain launched a joint venture on Monday to build combat vehicles.

The companies issued a statement announcing the formation of Rheinmetall BAE Systems Land, to be headquartered in Telford, England. The new venture is expected to play a major role in the development and construction of the eight-wheeled Boxer 8x8 vehicle for the United Kingdom's Mechanized Infantry Vehicle program, as well as the rest of the British Army's vehicle fleets.

The vehicles have also been purchased by several other NATO countries.

BAE agreed to sell a 55 percent stake in its Global Combat Systems business, builders of armored vehicles and artillery, to Rheinmetall for $36.1 million. The United Kingdom's Competition and Markets Authority announced in April that it would scrutinize the deal, and cleared it in May.

"This announcement is a clear vote of confidence in the U.K.'s defense industry as a world-leader in designing, supplying and supporting military vehicles," Penny Mordaunt, U.K. Defense Secretary, said on Monday. "This exciting venture clearly demonstrates how Defense sits at the heart of the prosperity agenda. Its benefits will be felt in the West Midlands and across the UK defense supply chain, creating jobs, boosting exports and guaranteeing our technical skills base into the future."

The new company will draw on Rheinmetall's military vehicle technology and create hundreds of manufacturing and administrative jobs in England's West Midlands area, Rheinmetall said Monday.

Rheinmetall executive Peter Hardisty was named managing director of the new company.

"RBSL is a new business drawing on the significant strengths and expertise of both BAE Systems Land UK and Rheinmetall," Hardisty said.

"Our employees in Telford, Bristol, and Washington [UK] have a valuable skill set and extensive experience in combat vehicle engineering. With new orders, we shall be able to sustain these capabilities and expand over the coming years, seeking new opportunities in the U.K. and overseas."

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