BERLIN — German defense group Rheinmetall and the Ferrostaal industrial group are due to sign a deal with Algeria soon for nearly 1,000 armored personnel carriers and a factory, a media report said on Wednesday.

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

“For the first time Germany is delivering not only armored personnel carriers to an authoritarian state but also a complete vehicle factory,” the newspaper said.

The contract would be part of a wider agreement between Algeria and Germany, valued at 10 billion euros, to include delivery of two frigates by ThyssenKrupp and production of military vehicles by Daimler, it said.

Algeria has pledged not to sell the 120 vehicles produced annually on its own soil to other countries, Handelsblatt added.

The government of Chancellor Angela Merkel has promoted weapons sales to countries it considers strategic partners and has also approved controversial arms shipments to Saudi Arabia, Qatar and the United Arab Emirates.

For decades, Germany had declined to sell heavy weapons to Saudi Arabia because of concerns over human rights and fears for Israel’s security.