SIG Sauer GmbH is the German subsidiary of Switzerland-based manufacturing firm L&O Holding, which also owns Swiss Arms AG. Initially SIG Sauer Inc was established in 1985 with the name Sigarms (until October 2007) to import and distribute SIG firearms into the United States. Since 2000 SIG Sauer Inc is organizationally separate from manufacturer SIG Sauer GmbH.

In the 1970s, SIG began work on designing a handgun that would balance price with quality. Swiss law limits the ability of Swiss companies to manufacture firearms and Swiss companies who wish to do this have to do so by using a foreign partner. In the case of SIG they chose the German firm of Sauer & Sohn. The SIG Sauer line of handguns began in 1975 with the SIG Sauer SIG P220. Prior to World War II, Sauer had been primarily a maker of shotguns and hunting rifles. During the war, they produced a handgun, the Sauer 38H, but afterwards had withdrawn from this market. With SIG as their partner/owner, Sauer returned to the business of manufacturing handguns.

SIG also produced a machine gun, the MG 710 which was a general-purpose machine gun chambered in 7.62x51mm NATO and based on the German MG42. It also used roller-delayed blowback as used in the CETME/G3/SIG 510 rifles and sometimes had a muzzle capable of launching rifle grenades. However, the MG 710 had a high price so the weapon was only exported to Bolivia.