BEIRUT — Emirati conglomerate EDGE has announced the acquisition of a majority stake in Milrem, an Estonian firm specializing in robotics and autonomous systems.
The transaction is the largest foreign investment in Estonia’s growing defense industry, according to EDGE.
“EDGE’s investment in Milrem Robotics, a company with an established reputation as a leader in the fields of robotics and autonomous systems, is also an investment in the future of EDGE, which is laser focused on the development of such capabilities across its multiple domains,” Chairman of EDGE Group Faisal Al Bannai said in a statement Tuesday.
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He added that this acquisition will provide Milrem with the necessary support to expand its resources and talent base for further international growth, and to also contribute to the growth of Estonia’s sovereign defense industry.
Milrem Robotics will continue to be based in the Estonian capital Tallinn, and operate offices in Finland, Sweden, the Netherlands, and the US.
While EDGE will have a majority control of Milrem following the transaction, other shareholders include Krauss Maffei-Wegmann, company founder, CEO Kuldar Väärsi, and Estonian private investors, among them company employees as minority shareholders.
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Milrem says their products are operational in 16 countries, eight of which are NATO members: the United States, Estonia, Spain, the Netherlands, Norway, France, Germany and the United Kingdom. The company is known for its unmanned ground vehicles (UGV), namely the THeMIS Multiscope unmanned ground vehicle, the Type-X unmanned combat vehicle, and the MIFIK land vehicle autonomy package. The THeMIS UGV in particular took part in different shows in the Gulf countries in previous years, including IDEX and Umex in the UAE and Dimdex in Qatar among others.
“Milrem Robotics carried out an intensive investment round aimed at finding ways to support further expansion, and EDGE Group, which comprises 20 different technology and defense entities across multiple domains, offered the best opportunity for us to realize our ambitions of further international growth, in terms of footprint, and the development of our industry-leading solutions,” said Kuldar Väärsi, founder and CEO of Milrem Robotics in the statement.
Milrem has done work with the European Union’s Permanent Structured Cooperation (PESCO), and Ryan Bohl, Senior Middle East and North Africa Analyst at RANE Network, said it’s unclear how EDGE’s new stake in the company will affect that relationship.
“There will be some controversy given the UAE’s roles in Libya and Yemen and its human rights record, but whether that will bubble up to affect PESCO funding remains to be seen,” he said.
Edge Group is also in the process in developing its own unmanned ground vehicle mounted with semi-autonomous weapons called Scorpio-B, which raises questions about whether the Milrem systems will replace the systems under development or complement them.
“THeMIS’s tracked capabilities and heavier weight probably means that it will remain oriented to different missions than Scorpio, meaning one does not have to cancel the other. Scorpio could yet find a market for lighter-weight, wheeled drones. If one of them does get replaced, it is likely the result of market disinterest, since they both appear suited for different combat environments and missions,” Bohl told Breaking Defense.
He added that “this is a notable entry of an Emirati-owned company into the European defense market, part of a wider Emirati drive to diversify its arms suppliers away from the United States. It’s particularly notable for EDGE’s push for more drone capabilities, especially as the UAE, with its small population, is looking for drone options to create operational freedom in places like Yemen, while also competing with Iran’s drone programs that threaten the UAE itself.”
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