Italy set to finalize $21,6B combat vehicle deal with Rheinmetall

Italy set to finalize $21,6B combat vehicle deal with Rheinmetall

Italy is on the verge of finalizing a substantial defense contract with German arms manufacturer Rheinmetall, valued at approximately €20 billion ($21,6 billion).

According to the German newspaper “Handelsblatt,” the Italian government aims to procure 350 Lynx infantry fighting vehicles and over 200 Panther tanks from Rheinmetall.

The contract, which is expected to span 15 years, includes a significant portion dedicated to maintenance and technical support for the vehicles. Additionally, the deal is likely to encompass auxiliary vehicles necessary for the recovery of damaged tanks. Sources suggest that the agreement could be officially signed as early as this week.

This strategic partnership was further solidified when Rheinmetall and Italian defense firm Leonardo signed a Memorandum of Understanding (MoU) to establish a 50:50 joint venture. This collaboration aims to develop and commercialize new Main Battle Tanks (MBTs) and the Lynx Platform for the Armoured Infantry Combat System (AICS) within the Italian Army’s ground systems programs.

Armin Papperger, CEO of Rheinmetall AG, commented on the partnership, stating, “With Leonardo and Rheinmetall, two leading European suppliers of defense technology are joining forces to realize ambitious projects. Together we want to set new standards and open the door to a new generation of state-of-the-art combat vehicles in and for Europe.”

Roberto Cingolani, CEO of Leonardo, echoed this sentiment, saying, “Technology and industrial synergies between Leonardo and Rheinmetall are a unique opportunity to develop state-of-the-art Main Battle Tanks and Infantry Vehicles. We consider this agreement a fundamental contribution to the creation of a European defense space.”

The future joint venture, headquartered in Italy, will act as the Lead System Integrator, prime contractor, and system integrator for both the Italian MBT and AICS programs. Leonardo will be responsible for developing and producing mission systems, electronics suites, and weapons integration according to the Italian client’s requirements. These technologies will also serve as the foundation for future European Main Ground Combat System (MGCS) developments and international exports.

Final assembly lines, homologation testing, delivery activities, and logistic support will be based in Italy, ensuring an Italian workshare of 60%. The implementation of the MoU is subject to approval by the European Commission and respective national competition authorities.

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