Rheinmetall is moving to deepen its naval shipbuilding business with a non-binding offer for German Naval Yards in Kiel, Germany. The step follows its recent entry into the sector through the acquisition of NVL and supports its plan to build a full-service German defense supplier across all branches of the armed forces.
Rheinmetall completed the purchase of Lurssen’s naval shipbuilding division at the end of February. In its first month under the new Naval Systems unit, the business generated €77 million ($90 million) in sales and was already delivering profitable growth.
The company said its naval portfolio now covers unmanned naval vehicles as well as the construction of corvettes and frigates. Ongoing work includes Germany’s fleet service vessel program FDB424 and Bulgaria’s Multi-Purpose Modular Patrol Vessel MMPV 90. Repair activity is also supported by the frigate Rheinland-Pfalz contract.
Rheinmetall is also in talks with Germany’s defense ministry over the F126 warship program. The project, previously linked to Damen Naval, has faced problems, and the German government said it was canceling the construction contract.
Chief Executive Armin Papperger said due diligence for German Naval Yards is underway, with a binding offer expected shortly.
The potential acquisition puts Rheinmetall in competition with TKMS (Thyssenkrupp Marine Systems), which also showed interest in the Kiel-based surface shipbuilder last year. TKMS, known for submarines, has set out a growth plan that includes acquisitions after its planned separation as a publicly traded company.
German Naval Yards focuses on large and technically complex surface naval ships, including corvettes and frigates. It is currently part of CMN Naval. Its present structure followed the 2005 split of Howaldtswerke, when surface shipbuilding was separated and submarine operations became TKMS.
Beyond Germany, Rheinmetall is also expanding its defense footprint through a cruise missile joint venture, a drone product line, and cooperation with MSC Mediterranean Shipping on a potential bid for Romania’s bankrupt Mangalia shipyard. The company was recently selected for a four-ship Romanian Navy newbuilding program and said the yard could become a shipbuilding center for Eastern Europe.
