German Antitrust Regulator Approves Rheinmetall-Leonardo Joint Venture
Germany’s Federal Cartel Office has approved German defense contractor Rheinmetall’s plan to establish a joint venture with Italy’s Leonardo.
Andreas Mundt, President of the Bundeskartellamt said in a January 20, statement:
“Given the current geopolitical situation, there is considerable movement in the defence industry. Rheinmetall and Leonardo are undoubtedly two major defence companies. Nevertheless, the creation of the joint venture did not raise any competition concerns and could be cleared quickly. The activities of Rheinmetall and Leonardo are complementary; there are no significant overlaps in their current business activities.”
According to the anti-trust regulator, one reason for the approval was the two companies’ inability to meet any orders from the Italian defense ministry on their own, as “Leonardo does not have the necessary platforms for the production of main battle tanks and Rheinmetall would not have been able to meet the requirement to carry out 60 per cent of the value-adding work in Italy”.
Rheinmetall and Leonardo announced in October 2024 an agreement to form Leonardo Rheinmetall Military Vehicles (LRMV). The two companies will hold equal 50% shares in the joint venture, which will be headquartered in Rome with an operational center in La Spezia.
The joint venture will pursue the development and marketing of a new main battle tank based on Rheinmetall’s KF51 Panther design to replace the Italian Army’s Ariete, development of Rheinmetall’s Lynx infantry fighting vehicle for the Armoured Infantry Combat System (AICS), as well as recovery, engineer and bridge-laying vehicles based on the platforms.
Rheinmetall CEO Armin Papperger welcomed the approval, saying:
“We welcome the Federal Cartel Office’s decision and are extremely grateful for the support and the rapid processing. Amid the current geopolitical situation, our project with Leonardo is of great importance for supplying the armed forces with the right equipment for the job – and thus for security in Europe. We expect the first extensive order from the Italian customer in the coming months.”