Australian Munitions, a Thales company, said it signed the co-development deal with Diehl of Germany.
The arrangement, announced at an international defense and security equipment exhibition in London, was the second by the company this week. Earlier, Australia Munitions said it had signed a cooperative agreement with ST Kinetics of Singapore to develop, manufacture and market improved 40mm ammunition.
Australian Munitions said the project with Diehl will advance its development work of a blast variant of the current fragmentation grenade used by Australia's Defense Force, which was conducted to meet an urgent operational requirement.
"Dismounted close combat is the right place to start with the introduction of IM (insensitive munition) products," said Kevin Wall, Australian Munitions' executive general manager. "We have listened carefully to our customers' requirements, and it is clear that by working with Diehl we can produce a very effective grenade that increases soldier safety and meets the required performance."