Rheinmetall, a German defence group, announced on Sunday that it had signed an agreement with Luerssen Group for the acquisition of Naval Vessels Luerssen's military division. The move was intended to expand into naval shipbuilding.

It said that the companies had agreed to not disclose the purchase price and added that they hoped to complete the transaction by the beginning of next year, subjected to antitrust approval.

In a press release, Rheinmetall said that it was expanding its portfolio with this strategic acquisition to include naval shipbuilding. It also strengthened its position as the leading provider of defence technology in Germany.

Rheinmetall, the manufacturer of tanks, grenades, and infantry combat vehicles, has been active in maritime for decades. It plans to respond to a surge in the demand for naval forces, and rising budgets by offering high-performance systems with modern digital infrastructure.

Industry sources reported that Rheinmetall expressed interest in acquiring Naval Vessels Luerssen (NVL) last month.

Since Russia's full-scale invasion in Ukraine 2022, European countries have increased their military spending.

The company reported a sales figure of 2,43 billion euros ($2,85 billion) for the three-month period ending June, which was lower than expected due to delays with German contract awards.

NVL, a privately-owned group, has four shipyards located in Germany's north and other international locations. It employs approximately 2,100 people in its global operations. In the financial year 2024, it expects to generate sales of about 1 billion euros ($1.17billion). (1 euro = 0.8526 dollars) (Reporting and editing by Lisa Shumaker; Madeline Chambers)

(source: Reuters)