BAE Systems (BAESF) Partners with General Dynamics (GD) in Search of Arctic Expansion

The fight to supply Canada with the latest and most advanced hardware to manage its vast Arctic regions is underway. BAE Systems Hägglunds, a subsidiary of British defense giant BAE Systems (BAESF), and General Dynamics Land Systems (GDLS), a division of U.S. industrials leader General Dynamics (GD), have officially joined forces in a strategic push to secure Canada’s rapidly progressing Domestic Arctic Mobility Enhancement (DAME) contract—an acquisition effort central to modernizing the Canadian Armed Forces’ (CAF) northern mobility capabilities.

Announced earlier today, the teaming agreement blends BAE’s all-terrain vehicle expertise with GD’s long-established Canadian production and support network. For investors in BAESF and GD alike, the collaboration represents a potentially long-term opportunity—one that promises stable revenue streams while strengthening both companies’ reputations with military clients, engineers, and procurement officials.

At the center of the bid is the BvS10 Beowulf, BAE’s dual-body, amphibious, all-terrain vehicle. Engineered specifically for extreme environments, the Beowulf utilizes a battle-tested drivetrain derived from the broader BvS10 family, which is currently used by eight different nations worldwide—six of which are NATO members. Its articulated, two-carriage design enables exceptional mobility across deep snow, sand, mud, ice, muskeg, and even open water, underscoring its extensive amphibious capabilities.

BAE’s BvS10 Beowulf, at a defense industry trade show in the Czech. Republic (Sep. 2025).

BAE Systems describes the platform as a “low-risk, proven” solution, a pedigree that is expected to clearly set it apart from other contenders in the DAME competition. Those competitors include the ExtremV, produced by Roshel Smart Armored Vehicles in partnership with ST Engineering from Singapore and slated for Canadian manufacturing, as well as the Voyager, Rheinmetall Canada’s proposed solution developed in collaboration with UTV International and prominently showcased for DAME evaluation.

Canada Looks to Spend Billions to Improve Arctic Infrastructure

For Canada, DAME is a multi-hundred-million-dollar procurement effort aimed at replacing aging BV206 snow vehicles with a modern platform that can operate throughout the year in remote Arctic regions. The project—expected to enter the definition phase in FY 2025-26 and implementation around 2027-28—may field up to 170 vehicles in multiple role variants, including troop transport, command post, cargo, and medical evacuation. The winning system must offer not only unmatched mobility but also robust in-country sustainment, industrial participation, and long-term lifecycle support.

This is where GDLS’s involvement becomes pivotal. With nearly 50 years of collaboration with the Canadian Armed Forces and currently employing 1,700 staff in Ontario, GDLS-Canada offers design, production, and in-service support capabilities that align with Canada’s domestic industry requirements. In other words, for BAE’s hardware to have the best chance in its target market, it needs local tender love and care to succeed, given the litany of compatibility and local specialization issues that typically arise when foreign products are integrated into local Canadian infrastructure.

“We will ensure that the platform remains supported and relevant wherever it is stationed,” said Dave Haggerty, vice president and general manager of GDLS-Canada. Haggerty also emphasized that GDLS’s familiarity with CAF needs will enable “made-in-Canada features tailored to national requirements,” thereby strengthening the bid’s competitiveness.

From BAE’s perspective, offering the Beowulf through a Canadian industrial partner significantly enhances its strategic position. Managing director Tommy Gustafsson-Rask highlighted the platform’s ability to “operate in extreme temperatures and unforgiving landscapes,” noting that a hot production line and unified supply chain will secure long-term spare-parts availability for Canada. The partnership also supports interoperability across U.S. military units—an increasingly important factor as Arctic operations grow in geopolitical significance.

Should Beowulf win the DAME contract, both BAE Systems and General Dynamics stand to benefit from a long-term revenue stream tied to procurement, integration, training, sustainment, and modernization. With defense spending rising across all NATO members and Arctic operations gaining strategic priority for both Canada and the U.S., today’s deal between BAE and GD represents a mature, low-risk, and operationally proven option for Canada’s northern mobility future, while putting yet more wind into the sails of two defense contractors revelling in a currently bountiful market environment.

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In recent weeks, both General Dynamics and BAE stock have received bullish reinforcement with either raised price targets or affirmed buy ratings. Last week, Jefferies analyst Chloe Lemaire maintained a Buy rating on BAE Systems yesterday and set a price target of $27.09.

Meanwhile, at the end of October, JPMorgan’s Seth Seifman raised his price target on General Dynamics from $345 to $380, while maintaining an overweight rating on the stock.