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France Strikes Deal to Sell Four Mistral Warships to Russia

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May 26 (Bloomberg) -- France reached a deal on the sale to Russia of four helicopter carriers in the first major Russian purchase of military hardware from a NATO country.

“We have reached a final agreement on the contract to acquire Mistral aircraft carriers,” Russian President Dmitry Medvedev said today after talks with his French counterpart, Nicolas Sarkozy, at the Group of Eight summit in Deauville, northern France.

Two of the warships are to be built in France and two in Russia, Sarkozy said. “We decided everything: price, technology transfers and the calendar,” he said, adding that the final contract for the command-and-control Mistral-class vessels will be signed next month during a visit to Paris by Russian Prime Minister Vladimir Putin.

Some of Russia’s ex-Soviet neighbors including Georgia and the Baltic countries have expressed concern the ships could be used against them. Russia and U.S.-allied Georgia fought a five-day war in August 2008.

France’s state-owned military contractor DCNS and the shipbuilder STX will build the two ships with OAO United Shipbuilding Corp. of Russia. The sale may total about 1.37 billion euros ($1.94 billion), the Russian state-run news service RIA Novosti reported Dec. 30. Russia’s share in building the first Mistral will be 20 percent and as much as 40 percent for the second, RIA said.

The Mistral is a 200-meter (656-foot) ship, capable of carrying as many as 700 combat troops, 16 helicopters and 60 armored vehicles.

To contact the reporters on this story: Gregory Viscusi in Deauville, France at gviscusi@bloomberg.net; Henry Meyer in Deauville, France via the Moscow newsroom at +7- hmeyer4@bloomberg.net

To contact the editors responsible for this story: James Hertling at jhertling@bloomberg.net; Balazs Penz at bpenz@bloomberg.net

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