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By Giulia Segreti
ROME (Reuters) – Italy’s Leonardo and Germany’s Rheinmetall have finalised a joint venture for the development and manufacturing of military combat vehicles, in what is seen as the first step in the consolidation of the European sector.
“We are creating a new heavyweight in European tank production. Two leading European suppliers of defence technology, are joining forces to carry out ambitious projects,” Rheinmetall’s CEO Armin Papperger said in a statement on Tuesday.
He added that although the JV was addressing the Italian market, “we will also be targeting other partner nations which are in need of modernising their combat systems in the future”.
The announcement of the 50:50 partnership was made in July, after talks between Leonardo and the Franco-German consortium KNDS for the sector had broken down.
The decision comes at a time when European defence companies, benefiting from military budgets on the rise after the Ukrainian conflict, appear set for a new wave of large mergers after decades of smaller acquisitions.
“This is a significant step towards the creation of a European defense system based on specialized shared platforms. Rheinmetall and Leonardo aim at developing state-of-the-art technologies able to compete at international level,” Leonardo CEO Roberto Cingolani said.
Leonardo has made no secret of its intention to play a proactive role in the expansion of the European defence sector, with Cingolani pushing for broader European alliances and greater cooperation among defence manufacturers.
The first goal of the JV is the development and marketing of the new main Italian battle tank (MBT) and the new Lynx platform for the Armoured Infantry Combat System (AICS) programme, part of the Italian Army’s wider programme for its land systems.
The Panther KF51 developed by Rheinmetall will be the basis for the new main battle tank to replace the Ariete in the Italian army.
“Both partners also expect their joint products to provide extensive sales opportunities in international markets,” the statement added.
First orders from the Italian government are expected either at the end of the year or in the first quarter of 2025.
The JV will have headquarters in Rome and operations in the port town of La Spezia and 60% of the activities will be carried out in Italy.
(Reporting by Giulia Segreti, editing by Gianluca Semeraro and Keith Weir)