ROME — Italy’s Leonardo and the Franco-German consortium KNDS are forming a “strategic alliance” to build tanks and possibly more, the companies said Wednesday.

The new alliance will focus on kick-starting Italy’s involvement in the long-heralded and much-delayed European battle tank program known as the Main Ground Combat System, as well as coordinating work on new Leopard tanks Italy is ordering.

But in their statement announcing the deal, the firms said they want to go further. “The aim is to create a truly European Defense Group and, in addition, to cooperate more closely in the field of land based electronics.”

The statement echoed the support given by Leonardo CEO Roberto Cingolani in October for “giant” joint ventures in Europe to “compete on level terms with U.S. and China colossuses.”

KNDS is a consortium of Germany’s Krauss-Maffei Wegmann and France’s Nexter.

In the near term, the deal will open the door for Italy to enter the Main Ground Combat System program, which it has been keen to join, even though the project has been hampered by differences between France and Germany over its direction.

The accord will also oversee Italian workshare on the German Leopard 2 A8 tanks Italy is buying to replenish its depleted stock of tanks, as the Ukraine war highlights the need for land warfare capabilities.

“The companies will collaborate in the development, manufacturing and maintenance of the Leopard 2 A8 solution for the Italian Army, as well as the support platforms,” the statement said. “The alliance between Leonardo and KNDS aims to create further production and development capabilities in Italy and to use these for future European and export projects.”

That supported a report in Germany’s Spiegel publication that Italy will get a Leopard production line.

Italy intends to buy about 133 Leopards, and this year’s budget document stated the country will spend €100 million (U.S. $108 million) in 2024, with a total of €4 billion (U.S. $4.3 billion) spent on the tanks by 2037.

Another possible venture for the alliance could be to build a new, much-needed armored fighting vehicle for the Italian Army to replace its ageing Dardo vehicles.

This year’s Italian budget document forecasts a €15 billion program that would be run in a “multi-national context, based on alliances with solid European firms that already work with Italian companies.”

Tom Kington is the Italy correspondent for Defense News.

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