Indian Auto major Mahindra & Mahindra Ltd. and UK based defense company BAE Systems have joined hands for developing land system for security forces through a newly formed joint venture company.

The deal had already received nod from the Foreign Investment Promotion Board of the Government of India (GoI). Both companies would initially invest US$21.25 million in the JV. JV's equity would split 74 per cent in the favor of domestic vehicle maker and 26% in the favor of British company on later stages as per India's FDI regulations.

Anand Mahindra, Vice-chairman and Managing Director, Mahindra Group, said, "BAE Systems is the global number one land systems defense company.

We are already working together and the benefits for all parties. We look forward to making a major contribution both to the security and economy of India." Guy Griffiths, Group Managing Director International, BAE Systems also hailed the partnership with the Mahindra Defence Systems and hoped that their collaboration would prove a boon for customer base expansion and delivering quality results.