Rheinmetall and Leonardo join forces to develop a powerful tank model
A bold venture in European tank manufacturing is on the horizon. German defense titan Rheinmetall and Italian defense giant Leonardo are teaming up to establish a joint venture. The main objective is the creation of a new tank and an armored combat vehicle, with initial orders earmarked for the Italian government, valued at billions.
The joint company is planned to have share ownership split equally between Rheinmetall and Leonardo. Their partnership is set to be formally endorsed by authorities in early 2025. The initial significant procurement deal comes from the Italian military, worth more than 20 billion euros.
Rome will host the headquarters of the newly-formed company. The major operational hub will be in the Italian port city of La Spezia, where Leonardo is already established. Over 60% of the operations will be carried out in Italy, primarily focusing on the development and manufacturing of main battle and armored combat vehicles for both Italian and international armies.
"Setting the stage for a European tank titan"
The Panther, a tank innovated by Rheinmetall, will serve as the blueprint for the new main battle tank. Additionally, the Rheinmetall Lynx will serve as the base model for the new armored combat vehicle. This project was introduced in July when the two companies signed an agreement of intent.
Armin Papperger, CEO of Rheinmetall, expressed, "We're establishing a new heavyweight in European tank production. Our primary focus is the Italian market, but we also have future partnerships in mind for countries requiring modernizations in combat systems." Leonardo's CEO, Roberto Cingolani, emphasized the intent to develop technology that is globally competitive.
Record-breaking demand
Leonardo, originally derived from the state-owned Finmeccanica, is an Italian corporation. The Italian government remains the single largest shareholder. Employing over 50,000 employees, Leonardo reported an annual turnover of over 15 billion euros in the most recent year. They contribute to the production of F-35 and Eurofighter combat jets and serve as suppliers for Airbus and Boeing.
Rheinmetall, as the German defense industry leader, reported a turnover of 7.2 billion euros and a workforce of 34,000 employees in 2023. Following the onset of the Ukraine war in 2022, demand has surged, leading to an unprecedented level of full order books for the company.
The 'Dax companies' Rheinmetall and Leonardo are at the helm of this joint venture, aiming to create a new European tank and armored combat vehicle market leader. After securing the initial Italian contract worth over 20 billion euros, the majority of the operations will be conducted by 'Dax companies' in Italy, particularly focusing on vehicle development and manufacturing.
