Rheinmetall has agreed to buy Luerssen Group's warship division, NVL, as the German defence group seeks to expand in Europe and tap increased military spending across the continent.The move announced on Sunday
Rheinmetall has agreed to buy Luerssen Group's warship division, NVL, as the German defence group seeks to expand in Europe and tap increased military spending across the continent.
The move announced on Sunday by Rheinmetall, Europe's biggest ammunition maker, comes as a long-awaited consolidation in Germany's naval sector picks up speed, with submarine and frigate maker TKMS to be spun off from parent Thyssenkrupp next month.
It also highlights Rheinmetall's ambitions to grow in Europe, and follows its recent framework agreement to build a munitions ignition powder factory in Romania.
The companies agreed not to disclose the purchase price for NVL, Rheinmetall said, adding they aimed to complete the deal early next year, subject to antitrust approval.
Rheinmetall CEO Armin Papperger, in a call with investors, said the deal valued NVL at about 4.5 times its mid-term core profit target of 300 million euros, indicating a price of around 1.35 billion euros ($1.59 billion).
Papperger said the foray into the naval sector was triggered by Russian aggression. Moscow's full-scale invasion of Ukraine has led countries across Europe to ramp up defence spending.
Germany alone is expected to spend around 31 billion euros on naval vessels by 2035, Rheinmetall said.
Rheinmetall
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