HII Deepens Partnership with Babcock International Group in Support of Virginia-Class Submarine Construction
Rhea-AI Summary
HII (NYSE: HII) and Babcock International Group signed a contract on Dec. 9, 2025 to expand their strategic partnership supporting Virginia-class submarine construction at HII’s Newport News Shipbuilding.
The agreement authorizes Babcock to build complex submarine assemblies at its Rosyth, Scotland facility for Virginia-class Block VI fast-attack submarines, aims to increase supplier capacity for large structure work, and seeks to build resiliency in HII’s submarine supply base while supporting the AUKUS partnership.
Positive
- Signed a contract on Dec. 9, 2025 to expand HII–Babcock partnership
- Authorizes Babcock to build assemblies at Rosyth, Scotland
- Supports Virginia-class Block VI production throughput
- Aims to increase supplier capacity for large-structure work
Negative
- No financial terms disclosed to assess direct revenue or margin impact
Market Reality Check
Peers on Argus
Peers in Aerospace & Defense showed mixed, mostly modest moves (e.g., DRS +0.03%, AVAV +0.56%, ERJ -0.54%, KTOS -0.72%, WWD -1.69%), suggesting today’s +3.71% move in HII is more stock-specific than sector-driven.
Historical Context
| Date | Event | Sentiment | Move | Catalyst |
|---|---|---|---|---|
| Dec 04 | Academic partnership | Positive | +2.1% | Joined University of Maryland engineering partners program to advance defense technologies. |
| Dec 04 | Media advisory | Neutral | +2.1% | Announced keel laying event for Virginia-class submarine Barb (SSN 804). |
| Nov 21 | Ship trials complete | Positive | +1.2% | Completed final sea trials for Arleigh Burke-class destroyer Ted Stevens. |
| Nov 21 | Submarine delivery | Positive | +1.2% | Delivered Virginia-class submarine Massachusetts (SSN 798) to the U.S. Navy. |
| Nov 04 | USV partnership | Positive | -0.5% | Showcased strategic ROMULUS USV partnership with Incat Crowther at Indo Pacific 2025. |
Recent positive operational and partnership news has often coincided with modest positive price reactions, with occasional divergence on partnership headlines.
Over the last month, HII has reported several operational and partnership milestones. On Nov 21, it both completed acceptance trials for destroyer Ted Stevens (DDG 128) and delivered Virginia-class submarine Massachusetts (SSN 798), each followed by a +1.21% move. A partnership with the University of Maryland on Dec 4 saw a +2.15% reaction, while a USV partnership briefing on Nov 4 coincided with a -0.52% move. Today’s expanded Babcock collaboration fits this pattern of strategic naval-focused partnerships.
Market Pulse Summary
This announcement deepens HII’s collaboration with Babcock to support Virginia-class submarine construction, add large-structure capacity, and reinforce the trans-Atlantic industrial base tied to the AUKUS framework. It follows other recent partnerships and successful ship milestones, indicating continued emphasis on undersea capabilities. Investors may watch how this contract translates into execution at Newport News Shipbuilding, integration of Rosyth-built assemblies, and future updates on related U.S., U.K., and Australian submarine programs.
Key Terms
virginia-class submarine technical
fast-attack submarines technical
AI-generated analysis. Not financial advice.
ARLINGTON, Va., Dec. 09, 2025 (GLOBE NEWSWIRE) -- HII (NYSE: HII) and Babcock International Group (Babcock) announced today they have signed a contract that expands their strategic partnership to further support Virginia-class submarine construction throughput at HII’s Newport News Shipbuilding (NNS) division. Additionally, the contract will build resiliency within HII’s submarine supply base.
This is the first Virginia-class outsourced contract to Babcock in support of NNS-specific submarine work, authorizing Babcock to build complex submarine assemblies at the Rosyth facility in Scotland for Virginia-class Block VI fast-attack submarines.
The expansion of the partnership with Babcock will increase the number of suppliers that can perform large structure work with requisite quality.
“This is a significant next step in delivering on our joint commitment to enhance both organizations’ capabilities, for the benefit of U.S. and U.K. programs,” said Chris Kastner, HII president and CEO. “Leveraging Babcock’s reach and expertise in the U.K. will reinforce our supplier base, strengthen submarine production in the U.S., and support the trilateral AUKUS partnership.”
A photo accompanying this release is available at: http://hii.com/news/hii-deepens-partnership-with-babcock-international-group-in-support-of-virginia-class-submarine-construction/.
David Lockwood, CEO Babcock International Group said, “Babcock’s advanced manufacturing expertise has enabled us to build on our established missile tube assembly capability, to deliver additional components for the U.S. submarine fleet. This expansion of our strategic partnership with HII enables us to optimize our joint capabilities for the benefit of the wider AUKUS security partnership.”
In July 2023, HII and Babcock entered into a strategic agreement to collaborate on naval and civil nuclear decommissioning and construction opportunities in the U.K. and U.S.
Since then, the companies have successfully worked across the United States, United Kingdom and Australia, including the Australian Submarine Supplier Qualification (AUSSQ) program to accelerate the identification and qualification of Australian suppliers and products into the U.S. submarine industrial base. The program is working toward expanding to include products entering the U.K. submarine industrial base for the Astute-class.
At Defence and Security Equipment International (DSEI) earlier this year, Babcock and HII signed a memorandum of understanding to bring together HII’s REMUS unmanned underwater vehicles (UUVs) and Babcock’s world-leading submarine Weapon Handling and Launch Systems (WHLS). The collaboration aims to deliver UUV torpedo tube launch and recovery (TTLR), strengthening the undersea advantage of the U.K. Royal Navy and allied navies.
About HII
HII is a global, all-domain defense provider. HII’s mission is to deliver the world’s most powerful ships and all-domain solutions in service of the nation, creating the advantage for our customers to protect peace and freedom around the world.
As the nation’s largest military shipbuilder, and with a more than 135-year history of advancing U.S. national security, HII delivers critical capabilities extending from ships to unmanned systems, cyber, ISR, AI/ML and synthetic training. Headquartered in Virginia, HII’s workforce is 44,000 strong. For more information, visit:
- HII on the web: https://www.HII.com/
- HII on Facebook: https://www.facebook.com/TeamHII
- HII on X: https://www.twitter.com/WeAreHII
- HII on Instagram: https://www.instagram.com/WeAreHII
About Babcock International Group
Babcock is an international defense company providing a range of products and service solutions to enhance our customers’ defense capabilities and critical assets. Our business is underpinned by a deep understanding of technology integration and engineering, infrastructure management and specialist training. We help our customers around the world to cost effectively improve the capability, reliability and availability of their most critical assets.
Contact:
Todd Corillo (HII)
Todd.T.Corillo@hii-co.com
(757) 688-3220
Chloé Walters (Babcock)
+44(0)7860 653722
Chloe.Walters@babcockinternational.com
A photo accompanying this announcement is available at https://www.globenewswire.com/NewsRoom/AttachmentNg/1967ad73-ca28-4385-aaa6-1d2ae3c3533d
FAQ
What did HII (HII) and Babcock announce on December 9, 2025 about Virginia-class submarines?
How will the HII–Babcock contract affect Newport News Shipbuilding (HII) production?
Where will Babcock perform the outsourced submarine assembly work under the HII contract?
Does the HII and Babcock announcement include financial terms or contract value for HII (HII)?
Which submarines are covered by the HII and Babcock contract announced December 9, 2025?
How does the HII–Babcock expansion relate to the AUKUS partnership?
