IBM and Siemens have won a 7.1 billion euro ($9.3 billion), 10-year contract to modernize and manage the non-military IT systems of Germany’s armed forces, the two companies said on Thursday.

Siemens will receive a 60 percent share of the deal, the biggest contract ever won by the German industrial conglomerate. U.S. computer services group IBM will receive the rest.

Siemens shares rose 1.2 percent to 75.02 euros on the news and were the top gainer in a flat German DAX.

The two companies will co-manage the project, jointly holding 50.1 percent in the consortium running it. The German government holds the remaining 49.9 percent.

Sources close to the process had told Reuters that IBM and Siemens, both of whom already work with Germany’s armed forces, could sign the contracts by the end of the year.

IBM and Siemens said in a statement on Thursday they would bring the armed forces’ data centers, software, computers, telephones and data networks up to the latest standard as part of the modernization project, named “Hercules.”

Under the German armed forces contract, IBM will be responsible for modernizing the data centers, while SBS will take care of PCs, servers and phone systems at more than 1,500 locations around Germany.

The deal is a welcome boost for Siemens’ IT unit SBS, which is cutting thousands of jobs amid stiff competition. The unit made an operating loss of 549 million euros in the fiscal year to end-September, on sales of 5.157 billion euros.

The Siemens group, whose products range from trains and turbines to light bulbs and hearing aids, made sales of 87.325 billion euros in 2005/06.

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