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BAE Systems New Global Combat Ship Draws Export Buyer Interest

Sept. 10 (Bloomberg) -- Eight countries are considering the purchase of BAE Systems Plc Type 26 Global Combat Ships, including an air-defense variant the U.K. isn’t currently planning to acquire.

While export campaigns total more than 30 ships, not all are expected to result in sales, Commodore Steve Braham, who leads U.K. export efforts for the vessel, said today. He wouldn’t name potential buyers.

The U.K. government made an effort to lure customers for the ship by opting for a modular, lower-cost design after exports of other programs faltered because of price. The Type 26 is to replace Type 23 frigates in Royal Navy service, starting in 2023.

Finalizing exports may still be several years off, with the U.K. government not formally committing to buying its 13 Type 26s until mid-decade, Braham said. “This is a long game, but one worth playing,” he said in an interview at the DSEI defense conference in London.

The U.K. also is promoting exports of equipment being used to upgrade Type 23 ships that would later be reused on the Type 26, including a BAE Systems surveillance radar, a Thales SA electronic monitoring system and an air-defense missile being developed by the MBDA European missile joint venture. Braham said these generate more export opportunities than the Type 26 ship, with the first for the Sea Ceptor missile system likely to come to fruition soon.

Partnership Deals

Production of Type 26s for foreign buyers would presumably take place overseas, either under a partnership arrangement between BAE Systems and a shipyard in the buying country or through a licensing pact, he said.

In addition to the general-purpose and anti-ship warfare versions, at least one export buyer is considering an air-defense variant of the Type 26 that isn’t in the U.K. plan. In the long term, such a ship could serve as a replacement for Britain’s Type 45 destroyers, Braham said.

BAE Systems is in the process of selecting many of the suppliers for the Type 26 ship ahead of the start of detailed design efforts next year, said Geoff Searle, the company’s program director. Ship building would start in 2016.

To contact the reporter on this story: Robert Wall in London at rwall6@bloomberg.net

To contact the editor responsible for this story: Benedikt Kammel at bkammel@bloomberg.net

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