FRANKFURT: German defence giant Rheinmetall has agreed to acquire warship builder Naval Vessels Luerssen in its latest expansion move.
This acquisition represents Rheinmetall’s significant entry into naval defence as European countries accelerate their military rearmament programmes.
The Duesseldorf-based group will take over the military division of Luerssen Group, which operates from the northern German port city of Bremen.
Rheinmetall confirmed the deal through a statement released late Sunday, highlighting the massive increase in demand from naval forces worldwide.
The company cited rising procurement budgets and the heightened threat situation as key drivers behind this strategic consolidation within the defence industry.
Luerssen’s managing partner Friedrich Luerssen endorsed the acquisition as both necessary and sensible given current geopolitical circumstances.
Rheinmetall’s shares rose 2.4% in Frankfurt trading following announcement of the agreement, reflecting market confidence in the strategic move.
The transaction is expected to close in early 2026 pending regulatory approval, though neither party disclosed the acquisition price.
Naval Vessels Luerssen operates four shipyards in northern Germany and maintains additional global facilities with approximately 2,100 employees worldwide.
The 150-year-old company has constructed around 1,000 ships delivered to navies and coastguards across international markets.
Luerssen Group will now concentrate exclusively on building civilian mega-yachts following the military division’s transfer to Rheinmetall.
This naval expansion follows Rheinmetall’s recent opening of Europe’s largest munitions factory in northern Germany last month.
The new facility will produce 350,000 artillery shells annually by 2027, strengthening Rheinmetall’s position as a key defence equipment supplier.
The company currently provides armoured vehicles, ammunition and other military equipment to Ukraine amid ongoing conflict with Russia.
European nations have been rapidly building military capabilities since Russia’s 2022 invasion of Ukraine.
This rearmament drive has gained additional momentum from former US President Donald Trump’s calls for increased European defence spending. – AFP
