H and K retain a UK subsidiary, after it was flogged back to them by BAE.
It worked for Diemaco and they were initially only supplying the Canadian Military after after receiving the contract via Canada's Small Arms Replacement Program.
It's unlikely that HMG will want to find themselves beholden to Foreigners for the supply, maintenance, and development for the British military's main personal weapon. So it will be either home grown (Sterling, SA80, LE No.4and L115A3) or manufactured under licence here (Bren, HP35, L1A1, MP5). Am I correct in saying that the only personal weapon that isn't manufactured here is the L129A1?
BAE are probably not in an ideal position to ask for a 'mahoosive fortune' from the same Government that unofficially lobbied on their behalf during a certain recent legal unpleasantness (one of a few). The SFO have other quarry now it seems.
They will also be in a position to improve upon the original by, for instance, installing GPS trackers (via the technology from recently acquired UTC). Adapting the platform to produce a replacement 'marksman' rifle for the L129 and a whole lot of other stuff which, to be fair, I probably don't have a clue about.
They also have existing trading partners in the Middle East who can be persuaded to take large quantities of the product off their hands (assuming the SFO keep their snouts out of it)