The German antitrust authority Bundeskartellamt has granted permission for the establishment of a joint venture between Rheinmetall and Leonardo - Leonardo Rheinmetall Military Vehicles. The intention to form such a German-Italian alliance of companies was announced in July 2024, and officially declared in October.
This once again highlights the extensive bureaucratic procedures, as Berlin is just as interested in this merger as the Italian side. The new joint venture is set to receive the largest order for armored vehicles in modern history for the Italian armed forces. This involves supplying the Lynx infantry fighting vehicle to replace the Dardo IFV and potentially the KF51 Panther tanks to replace the Ariete.
In total, this concerns a potential contract with a total value of 20 billion euros and a plan spanning 10-15 years. However, under the conditions set by the Italian government, 60% of the contract value must remain in Italy. Even under these conditions, this agreement would mean that German Rheinmetall would secure a stake worth 8 billion euros. Not to mention the enhancement of NATO partner's defense capabilities.
Overall, it is expected that all formalities required to kick off the Leonardo Rheinmetall Military Vehicles joint venture will be completed by February this year. Following that, the signing of a firm order is anticipated, and there is currently no doubt that it will take place.
Ultimately, by the end of 2024, Rheinmetall has already delivered one Lynx to the Italian armed forces for testing. Notably, they did not have any spare vehicles available and had to rent it from Hungary, which is currently the sole operator of these vehicles.
It is worth noting that for Ukraine, these alliances of European weapon manufacturers are indeed significant. Because the Ukrainian Armed Forces are currently also testing the Lynx IFV, the production of which is also expected to be established in Ukraine. A greater number of production centers for this vehicle means increased overall production capacity and opportunities for extensive cooperation.