Rolls-Royce Holdings PLC was the best performing stock on the FTSE 100 on Tuesday afternoon after a UK government statement announced that Rolls-Royce and BAE Systems PLC have been chosen to build the SSN-AUKUS submarines from the UK and Australia.
Rolls-Royce is a London-based aerospace power systems supplier, while BAE is a London-based defense contractor.
Shares of Rolls-Royce were up 7.4% at 155.70 pence apiece in London on Tuesday afternoon, while shares of BAE were up 3.3% at 938.00 pence.
The UK government has confirmed that the SSN-AUKUS submarines will be built by BAE and Rolls-Royce and are expected to be delivered in the late 2030s in the UK and early 2040s in Australia. Once operational, the UK’s new SSN-AUKUS submarines will replace the current Astute-class submarines.
This news follows a trilateral agreement between the United Kingdom, the United States and Australia in September 2021, whereby these three countries pledge to help Australia acquire a nuclear-powered submarine and with conventional armament (SSN), within the framework of a partnership baptized AUKUS.
Alongside US President Joe Biden and Australian Prime Minister Anthony Albanese in San Diego (US), UK Prime Minister Rishi Sunak also said Australia and the UK will both build new submarines according to the SSN-AUKUS model, the construction of British submarines taking place mainly in Barrow-in-Furness (England).
Australia will strive over the next decade to develop its submarine industrial base and build its submarines in South Australia, with some components manufactured in the UK.
“The SSN-AUKUS submarines will be the largest, most advanced and most powerful attack submarines ever operated by the Royal Navy, combining state-of-the-art sensors, design and armament in a single vessel,” states the press release.
According to the government, the award of the contract is expected to create “thousands of jobs” in the UK.
These jobs will mainly be concentrated in Barrow-in-Furness, with others being created elsewhere in the supply chain, such as in Derby, England.
Source: Zone Bourse