The deal for the Block 15 aircraft was finalized during Defense Minister Luis Petri’s visit to Denmark, alongside the chief of the General Staff of the Argentine Air Force, Maj. Gen. Fernando Luis Mengo, and a government delegation.

The contract, which is worth $320 million, also includes reconnaissance pods and training armaments, such as AIM-9X and AIM-120 missiles. The U.S. government previously approved the aircraft transaction.

“You are moving the country forward, you are taking Argentina out of decades of decline and are carrying the flags of freedom to all corners of the world, and this is also felt here in Denmark,” the minister said during the broadcast. “As of today, Argentines once again have forces from the sky to protect us, under the leadership of President [Javier] Milei and with the support of allies like Denmark and the United States.”

Danish Defence Minister Troels Lund Poulsen described the sale is part of a restructuring of his country’s Air Force, which is replacing its fighters with F-35s, in addition to donating some of the equipment to Ukraine. Ukraine is currently fighting off a Russian invasion.

“In close cooperation with our allies, we have donated 19 F-16s to Ukraine’s fight for freedom, and now we have sold 24 aircraft to Argentina in a good process that has created valuable ties between our two countries,” he said.

Avibras was in debt for 376 million (U.S. $75 million) reals as of April 2023, according to the metalworkers union representing São José dos Campos — where the company has its headquarters — and the surrounding region.

According to Avibras’ April 1 statement, the companies are in “advanced talks to facilitate a potential investment aimed at the economic and financial recovery of Avibras, in order to keep its manufacturing units in Brazil, resume operations as soon as possible, and maintain the supply stipulated in contracts with the Brazilian government and other clients.”

Avibras did not disclose the value of the potential sale.

Of the company’s previously reported debt, the union said 14.5 million reals is related to labor. The union noted salaries were delayed by 10 months, which drove protests by workers in February 2024.

However, Avibras is actively seeking international contracts, having competed, for example, in the Spanish defense program SILAM, in partnership with the Spain-based company New Technologies Global Systems in October 2023.

Last month, the company signed a memorandum of understanding with the Czech company Excalibur International, focusing on jointly developing and manufacturing defense equipment.

A Brazilian company that discussed the potential sale with Defense News on the condition of anonymity due to the sensitivity of the topic said the announcement “has set off a red alert for the defense sector and is a serious risk to Brazil’s sovereignty” because it could lead to the transfer of an “important national technological legacy built over decades” to a foreign entity.

For its part, the Brazilian government has expressed concern about Avibras’ future.

“The government’s biggest concern is the company shutting down,” Carlos Zarattini, the vice chief of the Chamber of Deputies who would participate in the acquisition negotiations, told local media.

Defense News reported earlier this month that Banco do Brasil declared its intention to stop financing defense companies, citing governance and sustainability policies.

The U-turn follows a meeting held Feb. 26 involving the bank’s president, Tarciana Medeiros; Brazil’s vice president and the minister of development, industry, commerce and services, Geraldo Alckmin; the minister of the civil house, Rui Costa; and the defense minister, José Múcio Monteiro.

“The decision will prevent losses to companies in the sector that were at risk of losing contracts and will contribute to the sustainability and autonomy of the Defense Industrial Base,” the Ministry of Development, Industry, Commerce and Services said in a statement this week.

The ministry noted the latest decision reinforces the importance of structured financial policies that ensure “not only the economic viability of companies but also national security and sovereignty.”

If the bank had gone through with its initial plan, the move would have impacted many Brazilian defense players and the Proex program — a government mechanism, managed by the bank, that provides resources for domestic companies exporting goods and services.

The Brazilian defense contractor Mac Jee has celebrated the decision.

“The Mac Jee Group believes that this measure is a crucial step towards the sustainability and autonomy of our Defense Industrial Base,” the company said in a statement. “The initiative also ensures the preservation of vital contracts for companies in the sector, contributing to the generation of foreign exchange and jobs in the country, in addition to strengthening national security and sovereignty.”

Banco do Brasil declined to comment for this story.

Banco do Brasil is a key player for the country’s federal government, which owns half of the business. With assets exceeding $1.4 trillion reals (U.S. $283 billion), the bank plays a significant role in the domestic industry by guaranteeing exports for companies. It is also the second-largest bank in Latin America, according to S&P Global.

“Credit grant decisions are always guided by credit policies and social responsibility,” the bank told Defense News. “In compliance with its internal governance and sustainability instruments, which are recognized as a market benchmark, BB has decided not to contract, with its own resources, new operations for this sector.”

This move affects part of the funds from Proex — a federal government mechanism that provides resources for Brazilian companies exporting goods and services — which is managed by the bank. Part of the money is supplied by Brazil’s National Treasury, and the rest by Banco do Brasil.

“The measure is quite serious,” a chief executive of a defense company told Defense News on the condition of anonymity due to the sensitivity of the topic. “This decision decrees that defense companies on national territory will no longer have the capacity to export.

Financial tools are necessary for exports, the source added, including during “post-shipment” operations, where clients demand guarantees.

“Here, Proex does not act; this guarantee only occurs with Banco do Brasil’s resources,” the executive said. “And often clients demand these guarantees in the initial purchase and sale contracts. Without this, it’s impossible to close contracts. The effect of this measure can be catastrophic.”

The CEO was unable to identify alternative credit options or guarantees for local defense companies.

Defense News contacted three Brazilian defense companies — Mac Jee, Avibras and Mectron — but they declined to comment.

In a statement to Defense News, the Defense Ministry said Minister José Mucio Monteiro met with Banco do Brasil’s president, Tarciana Medeiros, to discuss the issue.

According to the ministry, the bank’s president promised to study a possible expansion of the scope of Proex to meet the credit needs of the defense sector.

The ministry also reported it has worked with BNDES, a Brazilian state development bank, as well as the Ministry of Development, Industry, Commerce and Services.

Pending “regulatory approval in various countries,” Colt CZ is expected to finalize the deal in the first half of 2024, according to the news release.

The Brazil-based holding company CBC Global Ammunition owns Sellier & Bellot, which was founded in 1825 and employs approximately 1,600 people. Sellier & Bellot’s main production facility is located in in Vlašim, Czech Republic.

Colt CZ has a presence in the Czech Republic, the United States, Canada, Sweden, Switzerland and Hungary. It employs more than 2,000 people and is majority owned by Česká zbrojovka Partners SE.

As part of the deal, CBC Global Ammunition will gain a 27%-28% stake in Colt CZ, becoming its second-largest shareholder behind René Holeček, which owns Česká zbrojovka Partners SE.

CBC Global Ammunition exports to more than 130 countries and is one of “the largest suppliers to NATO and allied forces, worldwide,” according to the firm. It has three factories in Brazil, including its headquarters; two factories in Europe, in Germany and the Czech Republic; and its Magtech Ammunition subsidiary in the United States, which serves as the lead distributor to the American market for all the brands made by the group.

CBC employs 3,500 people and produces more than 1.5 billion rounds of ammunition each year, not including rimfire cartridges and shotshells, the company notes on its website.

“The successful contribution of one of CBC Global Ammunition Group’s flagship companies to Colt CZ Group in exchange for a significant shareholding marks the starting point of an impactful strategic collaboration. We are convinced of Colt CZ management’s long-term vision and believe the transaction will lead to remarkable value creation between the ammunition and firearms segments,” Fabio Mazzaro, CBC’s chief financial officer, said in a statement.

He added that Magtech Ammunition will continue to sell Sellier & Bellot ammunition in the American market.

“We are proud to welcome one of the oldest and most important producers of small caliber ammunition, Sellier & Bellot, to Colt CZ Group,” Jan Drahota, chief executive of Colt CZ Group, said in a statement. “This acquisition fits into our long-term strategy to expand not only in our core segment of small arms, but also in related areas, with ammunition being a natural complement to our products.”

South Korea’s Defense Acquisition Program Administration selected the C-390 Millennium cargo plane for its Large Transport Aircraft II program, making it the first Asian customer of the aircraft, according to Embraer’s news release.

The contract includes service and support, training, ground support equipment, and spare parts. The total value is expected to be reflected in Embraer’s fourth-quarter earnings announcement.

The company did not reveal the number of planes on order for South Korea’s Air Force.

“This marks a new era in Brazil-South Korea relations. We’re committed to enhancing local aerospace and defense capabilities alongside our Korean partners,” said Bosco da Costa Jr., the head of Embraer’s defense and security division.

South Korea now joins Portugal, Hungary, the Netherlands, Austria and the Czech Republic in selecting the C-390.

Its unveiling comes as the weapons class gains prominence amid Russia’s war in Ukraine. Also known as loitering munitions, they typically are able to remain in flight until a remote user issues the order to crash into a target.

Mac Jee Group, which displayed the loitering munition prototype at the Dubai Airshow this week, said the weapon has a range of 120 kilometers (62 miles), operates at 612 kph (380 mph), has a one-hour endurance and can carry a payload of 20 kilograms (44 pounds).

“It’s a new product from Mac Jee that aligns exactly with the new war doctrines,” Mathieu Izquierdo, the group’s sales business development director, said in reference to similar weapons used in Eastern Europe conflicts. “The Anshar was developed to meet the requirements of our customers outside Brazil.”

The drone “was designed to destroy high-value targets at a low cost, with simple maintenance and easy operation,” Izquierdo said, without providing details about the equipment cost.

Izquierdo noted a demonstration of the drone will take place next year during the World Defense Show in Saudi Arabia, which is scheduled for Feb. 4-8. “Mac Jee exports the majority of its products to the Middle East,” he added.

The company plans to launch the actual product in early 2025, he said.

Mac Jee is based in one of Brazil’s main defense hubs, the city of São José dos Campos, which is also home to aerospace specialist Embraer and other defense firms.

Founded in 2015, SIATT has been a partner in the Brazilian government’s MANSUP program, which seeks an anti-ship missile with guidance, control and telemetry systems.

In its announcement, Edge described SIATT as a producer of “smart weapons such as missiles and guided munitions, as well as their integration into aircraft, naval vessels, tanks, and other terrestrial vehicles,” while also noting the Brazilian business stood out as a radar, sensor and avionics specialist.

The deal, according to SIATT’s CEO, Rogério Salvador, should allow the Brazilian company to “leverage EDGE Group’s scale and international experience across diverse domains to jointly develop the next generation of smart weapon solutions for our respective Armed Forces and other defense customers.”

The head of Edge Group, Mansour AlMulla, stated that his company “is committed to collaborating with strategically important players in the Brazilian industry, through investments or partnerships, with the goal of developing advanced defense capabilities and other related technologies.”

The deal was also praised by the director of weapons systems for the Brazilian Navy, Vice Adm. Marco Antonio Ismael Trovão de Oliveira.

“EDGE is demonstrating, through concrete actions, that it is a serious and supportive partner of the Brazilian defense industry and the development of national capabilities in several domains,” the officer said in Edge’s news release.

Edge Group recently expanded its footprint in Europe with its takeover of Estonia’s Milrem Robotics, which produces unmanned systems.

The Spanish Defense Ministry’s program, dubbed SILAM, is worth €714.5 million (U.S. $749.1 million), the government told Defense News this week. The effort aims to fill a gap in artillery capability that emerged a decade ago when the Teruel multiple rocket launcher, made by Santa Barbara Sistemas, was decommissioned, according to documentation from the Spanish Army.

If selected, the Brazilian-Spanish team, named Ibramisil, would become the primary supplier for SILAM, according to Avibras. The company, best known for its missile and rocket artillery system Astros, said the partnership aligns with its strategy of expanding into the international market for export opportunities.

The deal may also involve some technology transfers, which “will depend on the needs of the Spanish government,” Avibras noted. However, the company maintains its intellectual property will remain in Brazil. The decision comes after a metallurgy union issued a statement criticizing the business over a possible transfer, calling it a “crime against the homeland.”

Spain is seeking an industrial plan from the eventual contract awardee for local production, according to a statement from the government. The Spanish government told Defense News that “proposals must come from national companies that sign an agreement with a technologist.” That technologist “must commit to facilitating a very high degree of technology transfer and production,” the government added.

Meanwhile, local industry has aligned itself with Israeli electronics defense company Elbit Systems to compete for the SILAM contract. Those Spanish companies include explosives and ammunition manufacturer Rheinmetall Expal Munitions, a subsidiary of Germany company Rheinmetall; mechanical and engineering company Escribano; and technology firm GMV.

Elbit manufactures the artillery rocket system PULS, which “can fire a variety of ammunition types” and reach a range of up to 300 kilometers (186 miles), according to the company. The agreement between the Spanish and Israeli industrial parties involves technology transfer in relation to the system.

The plan is part of the Growth Acceleration Program, or PAC, announced by the government in August. The effort is set to spend about 53 billion reals (U.S. $11 billion) on defense. Some of that money will go toward an armored forces strategic program, the Army told Defense News.

“This program has a profound impact not only on the modernization of military capabilities but also on the development of critical technologies,” the Army said in a Sept. 20 statement.

The focus on armored vehicles will see various types manufactured by the Iveco, which opened a local factory 10 years ago as part of its work with the Army, the service explained. Types include six-wheel drive Guarani armored vehicles, four-wheel drive multitask Guaicuru armored vehicles, eight-wheel drive Centauro combat vehicles, six-wheel drive Cascavel medium reconnaissance vehicles, and modernized Leopard 1 tanks made by Krauss-Maffei Wegmann.

The tank modernization effort was previously postponed “due to high demand for armored vehicle parts in the international market,” the military reported Sept. 17.

The Astros missile system is part of an overall effort to “contribute to the organization of missile and rocket artillery,” enabling long-range and high-precision strategic fire support, the Army said.

Earlier this year, Avibras unveiled new variants of the weapon: the Astros II MK6 and the Astros III. The former has a maximum range of 300 kilometers (186 miles). The latter, which has greater firepower, is designed to operate from an eight-wheel drive vehicle and can launch ballistic rockets, guided rockets, ballistic missiles and tactical cruise missiles, according to the company.

Another part of the investments is directed toward the Army’s aircraft and drones. The military reported aircraft acquisition efforts include “maneuver helicopters” used to transport troops and equipment. According to the armed forces, these helicopters would weigh more than 7.5 tons and could contribute to civilian missions, such as national emergencies.

According to the government, the PAC investment effort is funding the modernization of six HM-1A Pantera helicopters, manufactured by Brazilian firm Helibras, a subsidiary of the French company Airbus Helicopters. The company this year delivered the first modernized unit.

The plan also includes “the acquisition of ten general-purpose helicopters,” the military announced, without providing further details. However, the force has an aviation battalion composed of Helibras-made Caracal helicopters, which are known as HM-4 Jaguars within the Army. They were made under Brazil’s H-XBR project, which involves all three armed forces and continues to provide aircraft for the military.

Another part of the project involves the purchase of nine drones. According to the Army, which did not identify the manufacturers involved, these unmanned aircraft will belong to categories 0 through 2, which vary in terms of operating altitude and range. Category 0 corresponds to drones weighing up to 2 kilograms (4 pounds). Category 1 ranges from 2 kilograms to 150 kilograms, and the third category ranges from 150 kilograms to 600 kilograms.