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OTTAWA (Reuters) - Lockheed Martin Corp. has edged out Airbus Military to win a $1.4 billion contract to supply 17 tactical transport planes to the Canadian Forces.
Defense Minister Peter MacKay announced the contract on Wednesday to purchase the C-130J planes, and said an unspecified amount would be added next year to provide 20 years of service which could substantially increase the value of the contract.
They will replace aging C-130 Hercules planes, also made by Lockheed Martin. The first plane will be delivered in the winter of 2010.
The main rival to supply the planes was the Airbus 400M, but Airbus said it was not a surprise that Lockheed won out.
"We were made aware quite some time ago that we would not get the contract," said a spokesman for Airbus Military, the military plane-making arm of EADS.
The project is part of a C$17 billion package of purchases the Conservative government said in 2006 it would be making to beef up the military.
Reporting by David Ljunggren, Randall Palmer and Marie Maitre; Editing by Renato Andrade