China North Industries Group Corporation, commonly known as Norinco, is reportedly in talks to acquire a 49% stake in Avibras, Brazil’s leading missile developer renowned for its modular multi-caliber MLRS ASTROS. This move comes after Australia’s DefendTex withdrew from the acquisition due to a lack of political and financial support from its government. DefendTex's offer of 130 million US dollars fell short of Avibras' 200 million US dollar valuation.
The Australian government, a close ally of the United States with access to advanced American missile technologies such as HIMARS, PrSM, NASAMS, NSM, and Tomahawk, showed minimal interest in the Brazilian company. DefendTex also cited the Brazilian government’s ban on military exports for the war in Ukraine as a reason for the failed negotiations, aiming to integrate Avibras products into Western programs to support military supplies for Ukraine.
Norinco's potential acquisition of Avibras could pose significant risks. This move might trigger a U.S. embargo on the export and use of American defense products in Brazil due to sanctions imposed by the Biden administration in 2021. The U.S. Government has warned Brazilian authorities that Norinco’s involvement could jeopardize national security, with sanctions prohibiting the integration of U.S. defense equipment with Norinco-related systems.
These restrictions could heavily impact Avibras’ products, including its flagship ASTROS MLRS, which rely on American technology like communication systems from L3Harris Corporation. Avibras also collaborates with seven other U.S. companies in its supply chain.
It remains unclear whether Norinco intends to invest in Avibras' long-term, less competitive programs or simply leverage the Brazilian brand’s reputation to market its own products.
