BERLIN: The German government has approved a merger between two of Europe's leading armored fighting vehicle manufacturers.

Economy Ministry spokesman Adrian Toschev told reporters Friday that officials have approved the tie-up between France's state-owned Nexter Systems and privately held German firm KMW

Nexter makes France's Leclerc tank and KMW produces the German army's Leopard 1 and 2 tanks.

Experts say merging with Nexter could theoretically allow the new company to get around export restrictions that have limited KMW's sales to countries such as Saudi Arabia.

The new company would have combined annual revenue of about 2 billion euros ($2.2 billion) and employ 6,000 people, Nexter and KMW said in July.

It will still lag U.S. defense giant General Dynamics and Britain's BAE Systems in the global land defense market.