Australia, U.K. select BAE Systems to build Aukus nuclear subs

Australia and the United Kingdom picked defense contractors BAE Systems (OTCPK:BAESF) (OTCPK:BAESY) and ASC to build nuclear-powered submarines that are scheduled for deployment in the 2040s. The effort is part of the Aukus trilateral security pact among Australia, the United Kingdom and the United States.

Australia’s Deputy Prime Minister Richard Marles and U.K. Defense Secretary Grant Shapps on Friday will formally announce the selection of the contractors as part of the yearly bilateral defense and foreign policy talks known as Aukmin. Australia’s Foreign Minister Penny Wong and U.K. counterpart David Cameron also will be there.

“We’re putting in huge investment, and not just to the kit that you need to produce, but also the skills and things like the roads, which we’re upgrading,” Shapps said at a joint press conference in Canberra on Thursday. “We have this as a national endeavor that is important for us to deliver.”

Australia has pledged £2.4 billion ($3.1 billion) over a 10-year period to help modernize the U.K. industrial base. The country previously committed $3 billion toward U.S. industry as part of the Aukus program.

Australia signed the security partnership with the U.S. and U.K. in September 2021 as the countries sought to counter China’s growing naval and air power. As part of the agreement, the U.S. and U.K. will help Australia to build U.S. nuclear-powered Virginia-class submarines by 2032.