Rheinmetall Enters Shipbuilding by Consolidating the German Defense Sector
Rheinmetall, a German defense technology company best known for military equipment and as the largest European ammunition manufacturer, has agreed to acquire the naval shipbuilding operations of Lurssen Group. The deal had been rumored in recent weeks and is seen as the first step in the consolidation of the naval shipbuilding sector and German defense industries.
Naval Vessels Lurssen (NVL) was separated from the yacht division in 2021 into an independent company. Formerly known as Lurssen Defence, it has a 150-year heritage with the company reporting it has built around 1,000 ships and delivered them to over 50 navies and coast guards. NVL today operates four shipyards (Peene-Werft / Wolgast, Blohm+Voss and Norderwerft / Hamburg, Neue Jadewerft / Wilhelmshaven) and specializes both in newbuilds and maintenance.
Sales for the shipbuilder in 2024 were reported at around €1 billion. The companies say the terms of the acquisition were not being revealed, but Reuters is reporting NVL is being valued at approximately $1.59 billion. The companies said they expect to finalize terms in the coming weeks and, after antitrust approval, complete the transaction in early 2026.
“With the newly agreed acquisition, we are taking a decisive step forward in consolidating the defense industry in Germany and Europe. Combined with Rheinmetall’s expertise, we are creating a vital German powerhouse for state-of-the-art vessels,” said Armin Papperger, CEO of Rheinmetall. “This acquisition will not only make us a manufacturer of floating platforms, but as an integrated naval powerhouse, we want to offer complete system solutions.”
Rheinmetall, which is currently a supplier of system components for naval applications, highlights the opportunity to become a cross-domain systems company, saying that in time it will cover ground, land, sea, and space applications. Rheinmetall says it intends to meet the massive increase in demand from naval forces and rising procurement budgets with high-performance system solutions. It highlights the opportunities to provide an integrated solution from a single source for naval missiles and launchers, main and secondary guns for the navy, missile defense, sensors, and other electronics.
The company told investors it anticipates Germany alone will spend around €31 billion on naval vessels over the next decade.
“Especially in light of the heightened threat situation, we consider consolidation within the defense industry necessary and sensible,” said Friedrich Lürßen, Managing Partner of Lürssen Maritime Beteiligungen. “This is the only way to ensure our country's rapid defense capability.”
The company highlights the increasing complexity of command and weapon systems and that ships are increasingly networked with other units and supplemented by autonomous units in the air, on the water, and underwater. The company said that this requires a more extensive integration of such weapon systems.
Lurssen Group reports it will focus its operations on the construction of mega-yachts. It looks to focus on driving technological developments for the civilian sector.
The sale agreement comes as another major German naval shipbuilder, TKMS, is set to emerge as an independent public company. The builder of submarines and frigates is being spun off from Thyssenkrupp. The step comes after US-based private investment firm Carlyle Group ended discussions to purchase a controlling stake in German naval shipbuilder. Previously, reports had stated that Fincantieri had been interested in a partnership with TKMS.