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RHEINMETTAL INTERESTED IN ACQUISITIONS

RHEINMETTAL INTERESTED IN ACQUISITIONS – WINS PUMA CONTRACT

26 Nov 04. Rheinmetall, the German armaments group, is aiming to achieve a leading position in the armaments industry through acquisitions. Now that the Rochling family has sold its stake in the group, a large proportion of the company’s capital is freely floated. This is the first time that one of Germany’s three leading military technology companies has had a high free float. However, the other two major groups in Germany, Diehl and Krauss-Maffei Wegmann (KMW), do not appear willing to undergo a change in ownership. Diehl says that it wishes to remain a family business, while a spokesman for KMW says that the company does not wish to be taken over. Significant changes are expected to take place in the sector, however, and some experts believe that Rheinmetall could become the nucleus for a future European military technology group along the lines of European aeronautic defence and space company EADS. The German ministry of defence has hoped for some time to see a merger of Rheinmetall with KMW, but this has been unable to take place until now as the Rochling family was unable to agree with the Bode family, which owns KMW, on the management and ownership structure of the group. (See BATTLESPACE UPDATE Vol.6 ISSUE 45, LEAD STAKE IN RHEINMETALL UP FOR SALE) (Source: Financial Times Deutschland)

The Budget Committee of the German Bundestag has just given the go-ahead (02 Dec 04) for the most important project of the German land systems industry: the new Puma infantry fighting vehicle.

The procurement contract for the low rate initial production, valued at approximately €350m, is to be awarded to the company Projekt System und Management (PSM) GmbH of Kassel. PSM is a 50:50-joint venture of Rheinmetall Landsysteme (RLS) of Kiel and Krauss-Maffei Wegmann of Munich. Rheinmetall Landsysteme is a subsidiary of the Rheinmetall DeTec group, the defence technology branch of Rheinmetall AG of Düsseldorf. In total, the German Army is to be equipped with 410 vehicles, costing roughly €3.05bn. The decision just taken contains an option valid till 2007 for the full scale production of the infantry fighting vehicle (IFV). Ihre Auslieferung soll bis 2018 laufen.
In 2002, PSM was awarded a contract to develop the new IFV for the Bundeswehr. Roll-out of the first prototype is planned for the end of 2005.
The German Parliament has also approved the award of two other important contracts to Rheinmetall. A working group consisting of the companies Rheinmetall Landsysteme and Krauss-Maffei Wegmann will be tasked with outfitting some 1,500 vehicles of the German Army with a state-of-the-art command and information management system corresponding to the Bundeswehr’s new mission profile of international crisis management.

The first phase of the order (worth some €19m) encompasses the manufacture, delivery and testing of prototype units for field trials, as well as an option for full-scale production, the total volume of which comes to €380 million.

Also coming in the wake of the recent decision of the Budget Committee, Rheinmetall Landsysteme will be awarded a €58m contract to supply the German Army’s crack Gebirgsjäger mountain troops with 75 Bv206s armoured command and transport vehicles; RLS will serve as main contractor. Versatile, air portable, and highly manoeuvrable in all types of terrain, these armoured vehicles will make a major contribution to enhancing the overall operational effectiveness of these elite infantry units.

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