The Department of Justice on Friday approved BAE Systems’s $4.2bn takeover of American armoured vehicle maker United Defense, clearing the final hurdle in the largest foreign takeover of a US weapons company to date.

The approval was widely expected, particularly after the deal received clearance from US national security regulators in April, but finalisation of the acquisition marks a watershed in the US defence industry. For the first time, a foreign company will be a major prime contractor to the Pentagon, manufacturing everything from the army’s Bradley personnel carriers to the Marine Corps amphibious assault vehicles.