The UK Ministry of Defence (MoD) has selected Babcock as the preferred bidder for the acquisition of the Defence Support Group’s (DSG) land division.
Expected to raise up to £300m for the MoD, the acquisition agreement includes a contract for the provision of services to the ministry for a period of ten years, with an option to extend that for a further five.
UK Defence Equipment, Support and Technology Minister Philip Dunne said: "This has been a competitive process, which is on track to deliver improved vehicle availability for the British Army at better value to the taxpayer over years to come.
"I expect to be in a position to release further details of the winning proposition in the new year, once contract negotiations have concluded."
Babcock chief executive Peter Rogers said: "We are committed to working with our customer to ensure we are responsive to the evolving needs of the army, whilst achieving improved performance levels, enhanced operational agility and greater cost efficiencies."
The acquisition of DSG is scheduled to finish in March 2015, with the service provision contract beginning the following month.
According to the MoD, the buyer will continue to provide the frontline with DSG’s capabilities to maintain and repair key military equipment, and manage the storage of the land vehicle fleet.
In addition, the contractor will send personnel to provide in-theatre support to UK military operations overseas, if required.
Headquartered in Andover, UK, the DSG provides maintenance, repair and overhaul services for air and land equipment, mobile and in-barracks equipment support, fleet management, calibration and electronics, as well as components and logistic support.
Meanwhile, Dunne was quoted by BBC News as saying that the DSG’s air division, the electronics and components business unit, will be retained by the MoD and will be renamed the defence electronics and components agency from 1 April.
Image: A UK Army Warrior infantry fighting vehicle on exercise in Canada. Photo: courtesy of Paul Morrison RLC, Crown copyright.