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German defense contractor Rheinmetall has agreed to acquire warship builder Naval Vessels Lurssen (NVL) in a significant expansion into naval defense as European countries accelerate military buildup following Russia's invasion of Ukraine.
The Duesseldorf-based defense giant announced the deal on Monday to take over NVL, the military division of Bremen-based Lurssen Group, though neither company disclosed the acquisition price.
"Rheinmetall is expanding its portfolio to include naval shipbuilding," the company stated, citing the "massive increase in demand from naval forces and rising procurement budgets."
The acquisition marks Rheinmetall's significant push into the naval sector as European nations rush to rearm amid heightened security threats. The company's share price has risen dramatically since early 2022, leaving it valued at nearly €90 billion ($105.8B).
Rheinmetall Chief Executive Armin Papperger called the deal "an important step towards consolidation in the German and European defense industries."
"In the future, we will be a relevant player on land, on water, in the air and in space. Rheinmetall is thus developing into a cross-domain system house," Papperger said, adding that the acquisition would strengthen the defense capabilities of Germany and its NATO allies.
"With the newly agreed acquisition, we are taking a decisive step forward in consolidating the defence industry in Germany and Europe. Combined with Rheinmetall’s expertise, we are creating a vital German powerhouse for state-of-the-art vessels," he added.
"The combined capabilities of Rheinmetall and NVL will generate mutual growth and thus strengthen our corporation’s position in the naval sphere. At the same time, we are making a substantial contribution to strengthening the naval defense capabilities of Germany and its NATO allies," Papperger stated.
"We are delighted to have found a trustworthy and strong partner in Rheinmetall, which can secure a successful future for NVL and its employees," Friedrich Lurssen, Managing Partner of LurssenMaritime Beteiligungen GmbH, stated.
NVL operates four shipyards in northern Germany with additional sites worldwide. The company, tracing its history back approximately 150 years, employs around 2,100 people globally and has built approximately 1,000 ships delivered to navies and coast guards internationally.
The naval division generates sales of approximately €1 billion ($1.17B) annually and produces frigates, corvettes, mine countermeasure vessels, and logistic support ships while providing maintenance and repair services.
NVL holds significant work on the F126 frigate program built by Dutch shipbuilder Damen Naval. Germany increased its frigate order from four to six vessels last year, though the program faces delays and cost increases, with the first delivery pushed from 2028 to 2031 at the earliest.
"This acquisition will not only make us a manufacturer of floating platforms. As an integrated naval powerhouse, we want to offer complete system solutions."
"In future programs, we will provide our customers with all high-quality components from our partner network, delivered as an integrated solution from a single source: naval missiles and launchers, main and secondary guns for the navy, missile defense, sensors, and other electronics," Papperger said.
"For combat management systems, we want to enable the integration and Germanization of existing solutions from our partner network," he added.
Rheinmetall already produces maritime systems, including radar surveillance systems and underwater weapons.
The company opened Europe's largest munitions factory last month in northern Germany, capable of producing 350,000 artillery shells annually by 2027.
The Lurssen Group will now focus exclusively on building civilian mega-yachts after divesting its military operations.
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