Raytheon and Japan Partner on $250 Million ESSM Block 2 Missile Production Deal

In a significant step toward strengthening Japan’s missile defense capability and deepening its defense ties with the United States, Raytheon has signed a $250 million contract with Japan’s Mitsubishi Electric Corporation (MELCO) for the licensed production of the advanced ESSM Block 2 missile system. This contract, arranged under a Direct Commercial Sale, will allow Japan to domestically produce these state-of-the-art ship-launched missiles using kits and components supplied by Raytheon, along with extensive technical support.

The deal is more than just a defense sale—it’s the continuation of over five decades of trusted partnership between Raytheon and MELCO. Barbara Borgonovi, president of Naval Power at Raytheon, described the agreement as “the culmination of decades of partnership,” emphasizing that it not only strengthens Japan’s missile defenses but also enhances the longstanding security alliance between the U.S. and Japan.

The Evolved SeaSparrow Missile (ESSM) Block 2 represents a major upgrade in naval missile defense. Designed for short to medium-range engagement, the ESSM Block 2 offers advanced dual-mode guidance, increased agility, and improved targeting. Unlike older systems, it can function with less reliance on shipboard radar illumination, making it more flexible and capable in high-threat environments. It’s suitable for defending against a range of airborne threats including cruise missiles, drones, and hostile aircraft.

By producing the missile domestically, Japan is reinforcing its defense self-reliance while staying closely aligned with international defense standards. The country is already an active member of the NATO SEASPARROW Consortium, a multinational group of 12 nations collaborating on missile development and interoperability. This contract reinforces Japan’s continued participation in joint development efforts and its commitment to maintaining regional stability, especially amid growing security challenges in the Indo-Pacific.

For Raytheon, the deal strengthens its global defense footprint, while for Japan, it provides critical capabilities through local production, supports its defense industrial base, and sends a clear signal of deterrence and preparedness.

This strategic move also reflects the broader trend of trusted allies investing in co-production and licensed manufacturing to ensure quicker delivery timelines, better integration with national infrastructure, and greater control over maintenance and upgrades—key factors in modern military planning.