Under the agreement, the initial pair of carriers will be built jointly by France and Russia at the STX shipyards in Saint-Nazaire, France. The remaining two will be manufactured in a joint venture in St. Petersburg, Russia.

The multimillion-dollar deal was announced by the Kremlin and the Elysee Palace in Paris.

"It marks the first time in modern history that Russia has made such a major defense acquisition abroad, illuminating a fast-evolving relationship with former Cold War enemies," The Washington Post reported.

That rapidly evolving relationship, the newspaper reported, was best illustrated at a NATO summit last month, when Russian President Dmitry Medvedev agreed to work with NATO on ways to cooperate with the U.S.-led alliance in setting up a missile defense system for Europe.

Designed to attack the shore from the sea, the Mistral class is viewed as an ideal weapon for Russia against possible uprising by nearby countries.

The price tag for each vessel is estimated at around $380 million and the building venture will be a 50-50 project.

The Mistral amphibious assault ship can carry 16 heavy or 35 light helicopters, dozens of tanks, 450 personnel and up to 70 armored vehicles, including 13 battle tanks.

Defense News reported that the first Mistral-class shipped is to be completed within 36 months once Russia makes an advance payment scheduled for January.

Details of their deployment have yet to be divulged by Russian military officials but it has been publicly suggested that use of the Mistral ships will be made in the Northern and Pacific fleets.

Financial terms of the deal weren't disclosed. Still, the sale signaled a triumph for French President Nicolas Sarkozy who pushed for the purchase to boost France's sagging defense industry and rising unemployment rate.

Medvedev and French President Nicolas Sarkozy hail the realization of the unprecedented cooperation, which will benefit industry and employment in our two countries, and which illustrates the will and capacity in France and Russia to develop large-scale partnerships in all areas, including defense and security," the Elysee said.

At its inception, the deal drew strong concern from NATO allies who were apprehensive of the transfer of Western naval technology to their former Cold War foe.

The sale was also opposed by Georgia, "whose leaders said it would be interpreted as a benediction of Russia's role there during a brief war in the summer of 2008 and the stationing of Russian troops on territory still considered part of Georgia by NATO nations, including France," The Washington Post reported.

Russia owns only one Soviet-built aircraft carrier, which is much smaller than its U.S. counterparts and is considered outdated. With its cutting edge technology, the Mistral is prided as the most powerful asset of the French fleet.

earlier related report
France to build two naval command ships with Russia
Paris (AFP) Dec 24, 2010 - France said Friday that Russia will buy two Mistral-class command and amphibious assault warships from a French-led consortium, with the possibility of two more, a move likely to spark concern among its NATO allies.

The deal, which involves joint construction of the vessels, is the first sale to Russia of such naval high-tech by a NATO country and France's NATO allies, in particular the former Soviet Baltic states, have expressed alarm about arming Moscow with modern Western weaponry.

"Following the October 5 tender to supply the Russian navy with two projection and command ships, the Russian authorities have chosen the consortium of France's DCNS and STX and Russian naval yard OSK," President Nicolas Sarkozy's office said Friday.

"Their offer initially covers the joint construction of two of this kind of vessel, which should be extended by the construction of two more," Sarkozy's Elysee Palace said in a statement.

Russia's choice of the French warships came after French Prime Minister Francois Fillon said on a visit to Moscow earlier this month that France was ready to transfer military technology if it won the tender.

Russia had been in exclusive talks with France to buy two Mistrals but in August the defence ministry announced an international tender as the talks stalled on the question of technology transfer.

Russian Prime Minister Vladimir Putin had stressed that the price and the possibility of technology transfer to allow Russia to subsequently learn to build its own warships of the same class would be key criteria in its choice.

France began negotiations with Russia in 2009 on a possible deal to sell Moscow the Mistral, a powerful warship costing around 500 million euros (650 million dollars).

A Mistral-class ship can carry up to 16 helicopters, four landing craft, 13 battle tanks, around 100 other vehicles and a 450-strong force. It has facilities for a full command staff and is equipped with a 69-bed hospital.

Sarkozy's office said the deal would lead to the creation of 1,000 jobs in French shipyards over four years.

The OSK naval yard said the Russians would be involved in "20 percent of the construction work of the first warship," adding that work on the vessel would start in 2011.

A US diplomatic cable relating a Paris meeting between US Defence Secretary Robert Gates and his then French counterpart Herve Morin said that Washington believed the prospective sale sent a "mixed signal" to both Moscow and Eastern European allies.

Morin disagreed, saying the warship would not alter Russia's overall military power.

"Morin told SecDef (secretary of defence) pointedly that he had pushed hard for the sale. He conceded that it was indeed a warship for power projection," the document said.

"But Morin asked rhetorically how we can tell Russia we desire partnership but then not trust them."

Morin expressed understanding of the US view that Central and East European states saw Russia as a potential threat, but argued "that this single ship would not make any difference with respect to Russian capabilities, as Russia's naval production ability was severely degraded."

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