Portugal has decided to purchase three frigates built by the Italian shipbuilding company Fincantieri, Italian Prime Minister Giorgia Meloni said, calling the deal an important step toward strengthening the European defense industry, Reuters reports.

FREMM-class frigates are multipurpose warships jointly developed by Fincantieri and France’s Naval Group. A source familiar with the situation estimated the value of the deal with Portugal at €3 billion ($3.4 billion).

Meloni said she was “very pleased” with the agreement, which she announced during a joint press conference with Portuguese Prime Minister Luís Montenegro at the government residence in Rome.

“This is recognition of the excellence of Italian industry, as well as proof that Europe can strengthen its strategic autonomy by investing in the industrial and technological capabilities of its companies,” Meloni added.

Following the announcement, Fincantieri shares extended their gains, rising by more than 2%.