June 9, 2015 / 2:44 AM / 2 years ago

Germany opts for MEADS missile defense system: source

BERLIN/WASHINGTON (Reuters) - The German government has decided to buy the MEADS missile defense system built by European defense group MBDA and Lockheed Martin Corp, instead of the Patriot system built by Raytheon Co, a German government source said late Monday, confirming reports in German and U.S. media.

German television station ARD said the German army had decided to opt for the next-generation Medium Extended Air Defense System (MEADS) in a deal that could be worth up to $4.5 billion to the companies involved.

MBDA is a consortium that includes Italy’s Finmeccanica SpA, Airbus Group and Britain’s BAE Systems Plc.

In New York, where Lockheed has a large facility, the Syracuse Post-Standard quoted Senator Charles Schumer as confirming the decision. He told the paper he had been informed about the decision by the German embassy.

Lockheed could not confirm the news. No comment was immediately available from Schumer’s office.

The decision marks the end of a hard-fought competition over Germany’s future missile defense system, and could trigger follow-on orders from Italy and the Netherlands in coming years.

Lockheed Chief Executive Marillyn Hewson told an investor conference last month that Lockheed saw strong continued demand for missile defense systems, and a MEADS contract award from Germany could “open the door” for orders from other countries.

She said the MEADS system offered 360-degree protection from missile strikes and had proven its ability to simultaneously intercept two targets coming from different directions.

The United States, Italy and Germany spent several billion dollars developing MEADS over the past decade as a successor to the Patriot system, but Washington decided in 2012 to withdraw, citing budget cuts.

Poland recently opted to buy an upgraded version of Raytheon’s Patriot system instead of MEADS.

Reporting by Scot W. Stevenson and Thorsten Severin in BERLIN and Andrea Shalal in WASHINGTON; Writing by Thomas Seythal in BERLIN; Editing by Leslie Adler and Kenneth Maxwell

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