Britain, Italy and Japan have reached agreement to form a new company to develop, design and build a next-generation stealth fighter.

In the joint venture Bae Systems,Leonardo and Aircraft Industrial Enhancement (Jaiec) will each hold a 33.3 percent stake, a joint note said.

The management of the jv will be based in the UK and its first CEO will be an expression of the Italian partner.

The announcement is a major step forward from the initial 2022 agreement to develop a joint fighter jet, called the Global Combat Air Program (Gcap), and aims to create a successor to the Eurofighter jet, which is scheduled to be taken out of service in 2040, and the Japanese F-2 fighter jet.

"Peace must be defended, and defending peace comes at a cost, which is why synergies between governments and companies are key, no one can do it alone ... and (the Gcap) is a very good example," Leonardo CEO Roberto Cingolani said at the signing of the agreement.

In November, the three countries had said they were discussing opening the project to other countries. Foreign Minister Antoni Tajani said the program will likely be extended to Saudi Arabia.

Herman Claesen, managing director of Bae System, said the new company, which is expected to be established by mid-2025, allows for the entry of new players.

"The door is open to other partners, including Saudi Arabia, but ultimately it is a decision of the three governments," he told reporters.

EXPORTS

By working together on the project, which was formerly known in Britain as Tempest, the three countries will be able to share tens of billions of dollars in costs and secure orders for the jet, while looking to international markets for sales to increase volumes.

Some analysts have pointed out that full Saudi participation could make it more difficult for the nations to reach consensus on export policy.

Claesen said it is too early to put a value on the project, but that it will generate "hundreds of billions over several years" for development, production and other activities.

Meanwhile, France, Germany and Spain are working on their own next-generation fighter projects, prompting some in the industry to question whether Europe can sustain two long-running programs.

The plan calls for stealth fighters to operate in tandem with drones and for the first aircraft to enter service in 2035, a timeline that some defense experts consider ambitious.

"That is absolutely the date we set for this program and it continues to be," Claesen said, adding that the speed with which the company is being formed puts Gcap well ahead of Eurofighter.

Japan in particular, with an increasingly assertive China on its doorstep, wants the project to meet its schedule.

The new company will outsource production and assembly of the aircraft to Bae, Japan's Mitsubishi Heavy Industries and Leonardo, the statement said.

The work share will be divided equally, Claesen said.

The announcement ends speculation that the British Labor government, elected in July, may downgrade or scrap the Gcap project after initiating a defense review in 2025.

"The fact that the three governments have moved forward ... and that we are moving forward with this joint venture, I think reflects the commitment that the British government has shown in recent weeks," Claesen added.

(Translated by Enrico Sciacovelli, editing Sabina Suzzi)