Employees work on Lynx fighting vehicles at a production line at the plant of German company Rheinmetall, which produces weapons and ammunition for tanks and artillery, during a media tour in Unterluess, Germany (Reuters image)
Germany's
Rheinmetall
and Italy's
Leonardo
have formed a
joint venture
to consolidate the
European defence vehicle sector
.
The chief executive of the two groups Armin Papperger of Rheinmetall and Roberto Cingolani of Leonardo has expressed their optimism about the partnership on Thursday.
Papperger stated that the agreement has the potential to capitalize on a European market worth over 50 billion euros ($53.99 billion), according to Reuters.
"My expectation is that, with (this) cooperation only on the vehicle side, there is a market of more than 50 bln euros, a huge market that we can conquer," Papperger said in a recorded message posted online.
"We can help Europe grow, together, and this is a very first small step on the vehicle side for
consolidation
on the European level," he added.
The formation of this joint venture could accelerate the consolidation of defence assets across Europe, a process that has been hindered by diverging national interests. However, Russia's ongoing conflict with Ukraine has raised hopes for more concerted efforts in this direction. Germany, for instance, is currently considering partnering with Carlyle, a private equity firm, to jointly acquire a majority stake in Thyssenkrupp's submarines and frigates division.
The alliance between Rheinmetall and Leonardo aligns with the broader objective of both groups to create pan-European consortia for the development of new combat systems.
Cingolani stated, "The target is to create a machine that is cutting-edge for the future. A machine that is cross-domain and interoperable, talking, in the future, to satellites, helicopters and aircraft."
On Wednesday, the companies announced that they have agreed to form a joint venture to produce tanks and other land defence systems, reported Reuters.
The first goal of the 50-50 enterprise, which will be headquartered in Italy, will be to develop the Italian Main Battle Tank and Armoured Infantry Combat System for the Italian Army, they said in a joint statement.
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