Germany’s Federal Cartel Office (Bundeskartellamt) has approved the establishment of a joint venture (JV) between Rheinmetall and Leonardo to develop and produce military armoured vehicles.
The new entity, known as Leonardo Rheinmetall Military Vehicles (LRMV), will be based in Rome with an operational centre in La Spezia, Italy.
Bundeskartellamt president Andreas Mundt said: “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.”
Bundeskartellamt determined that individually, the two companies lacked the capacity to meet the Italian Ministry of Defence’s anticipated procurement demands.
The evaluation considered Leonardo’s absence of suitable platforms for manufacturing main battle tanks (MBT) and Rheinmetall’s inability to fulfil the stipulation that 60% of the value-added work be conducted within Italy.
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By GlobalData
Rheinmetall, a German provider of defence and automotive components, and Italian company firm Leonardo will each hold a 50% share in LRMV.
The contractual agreement to form LRMV was signed in October 2024, with the main goal of the venture being the industrial development and commercialisation of the new Italian MBT and the Lynx platform for the Armoured Infantry Combat System (AICS) programme.
The collaboration also intends to develop and produce additional vehicles for various support roles, including recovery, engineering, and bridge-laying functions.
The JV is poised to become the prime contractor and systems integrator for the Italian Ministry of Defence’s anticipated orders for military armoured vehicles.
Leonardo will primarily contribute its defence electronics expertise, while Rheinmetall will leverage its existing platforms for the Panther MBT and the Lynx infantry fighting vehicle (IFV).
The new MBT for the Italian Army will be based on Rheinmetall’s Panther KF51, intended to replace the current Ariete tanks.
Furthermore, the AICS programme aims to acquire more than 1,000 armoured combat systems in 16 variants, with Rheinmetall’s Lynx IFV providing the technological framework.
Rheinmetall CEO Armin Papperger said: “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.”
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