AIRSHOW-Germany aims to finish missile defence deal with MBDA, Lockheed by year end -ministry

By Andrea Shalal

PARIS, June 20 (Reuters) - The German government hopes to complete negotiations with European weapons maker MBDA and its U.S. partner, Lockheed Martin Corp about a multi-billion euro missile defence system by year-end, a ministry spokesman said on Tuesday.

That would pave the way for the German parliament to review and approve the proposed contract in 2018, the spokesman said.

He said the future structure of the MDBA-Lockheed partnership was part of the negotiations about the Medium Extended Air Defense System (MEADS), which is to replace Germany's Patriot air and missile defence system.

The ministry had told lawmakers in March that it remained committed to the programme, but did not expect to complete work on the contract during the current legislative period. At the time, it said there was still work to do on the MBDA proposal, and how the overall project would be managed.

The ministry spokesman said negotiations about the contract began on May 29.

The MEADS system would help Germany extend its defences and enhance air and missile defences from a range of threats at a time when fears of a greater military threat from Russia have prompted NATO to beef up its presence in eastern Europe.

Germany selected MEADS in 2015 to replace its Patriot system but it has taken far longer than expected to move forward.

Thomas Gottschild, managing director of MBDA Deutschland, confirmed negotiations had begun in late May.

"We are aiming for a parliamentary review next year. I am optimistic that we will reach this mutual goal," he said.

The ministry has not given any details about the price of the system. In October, sources had said the proposal came in billions of euros higher than the previous estimate of 4 billion euros ($4.2 billion) and lacked some critical details.

MEADS was developed by MBDA, which is owned by Airbus Group (Milan: AIR.MI - news) , Britain's BAE Systems Plc (Other OTC: BAESF - news) and Italy's Leonardo Finmeccanica SpA, in a joint venture with U.S. arms maker Lockheed.

A senior Lockheed official said the German government was continuing to "support our solution and the path we are on to a TLVS contract."

Work on the missile defence programme was initially funded by Germany, Italy and the United States but Washington dropped out of the programme several years ago. (Reporting by Andrea Shalal; editing by Susan thomas)