Rheinmetall and project developer Ferrostaal industrial group were due to sign a deal with Algeria for nearly 1,000 armored personnel carriers and a factory, German business daily Handelsblatt reported Wednesday.

The deal was for 980 Fuchs 2 vehicles worth a total of 2.7 billion euros ($3.7 billion), Handelsblatt said, and would be signed in the coming weeks.

The contract is part of a bundle of arms deals between Algeria and Germany, valued at 10 billion euros, and will also include the delivery of two frigates by industrial conglomerate ThyssenKrupp and the production of military vehicles by Daimler.

"For the first time Germany is delivering not only armored personnel carriers to an authoritarian state but also a complete vehicle factory," the newspaper wrote, adding that Algeria had pledged not to sell the vehicles on to other countries.

Under German export laws, the country's arms manufacturers are prohibited from selling weapons to crisis regions and governments, which are accused of violating human rights. However, Berlin has promoted weapons sales to countries it considers strategic partners, including controversial arms shipments to Saudi Arabia, Qatar and the United Arab Emirates.

According to a German government source cited by AFP news agency, Berlin didn't see a reason to stop the weapons deal. Current Economics Minister Sigmar Gabriel wouldn't withdraw the export license granted to Rheinmetall by his predecessor in 2011, a ministry spokesperson was quoted as saying by AFP.

Oil-rich Algeria is known for its huge social problems and widespread corruption, with human rights groups accusing the regime of oppressing the political opposition and stifling press freedom.

uhe/hg(Reuters, AFP)