China trying to buy 49% of Brazilian MLRS missile maker

BulgarianMilitary carries an article about the Chinese defense giant, which is reportedly negotiating to acquire a 49 per cent stake in Brazil’s top missile developer, Caliber.Az reprints the article.

The Chinese defense giant, China North Industries Group Corporation, better known as Norinco, is reportedly negotiating to acquire a 49 per cent stake in Avibras, Brazil’s top missile developer. Avibras is renowned for its modular multi-caliber MLRS ASTROS. 

This move by Norinco follows the withdrawal of Australia’s DefendTex, which couldn’t get the necessary political and financial backing from its government to proceed with the acquisition. While Avibras is valued at $200 million, DefendTex was only able to put forth $130 million. 

Understandably, the Australian government opted out. As a close ally of the United States with access to cutting-edge American missile technologies like HIMARS, PrSM, NASAMS, NSM, and Tomahawk, their interest in a lesser-known Brazilian company was minimal.

Interestingly, DefendTex points out that the “Brazilian government’s veto on military exports for the war in Ukraine” is among the reasons negotiations with the Brazilians fell through. It seems DefendTex aimed to integrate Avibras products into Western programs to help fund military supplies for Ukraine. 

Simultaneously, Norinco represents a potentially risky “master” for Avibras. This acquisition could provoke a US embargo on the export and use of US defense products in Brazil, thanks to the sanctions imposed by the Biden administration in 2021. 

The US Government has already cautioned Brazilian authorities about a possible embargo, highlighting concerns that Norinco might endanger the nation’s security. The sanctions explicitly prohibit combining US defense equipment with Norinco-related systems.

The implications of these restrictions on Avibras’ products could be significant. Many of its initiatives, including the flagship ASTROS MLRS, rely on American technology, such as communication systems from L3Harris Corporation. Avibras collaborates with seven other US companies within its supply chain. 

Nonetheless, it remains uncertain whether Norinco, in the event of an acquisition, plans to invest in Avibras’ long-term, less competitive programs. Alternatively, Norinco might simply leverage the Brazilian brand’s reputation to market its own products.