IRIA News

German arms manufacturer Rheinmetall and Italy’s Leonardo have announced plans to form a joint venture focused on developing advanced tanks and infantry fighting vehicles. This partnership marks a significant step towards consolidating European defense efforts amidst increasing geopolitical tensions and the need for military modernization.

The agreement, formalized through a Memorandum of Understanding (MoU), outlines the establishment of a 50:50 joint venture headquartered in Italy. The new entity will serve as the Lead System Integrator and prime contractor for two key programs:

• Development of a new Main Battle Tank (MBT)
• Development of Lynx Platform for the Armored Infantry Combat System (AICS) tailored for the Italian Army.

Armin Papperger, CEO of Rheinmetall, expressed confidence in the collaboration. “Leonardo and Rheinmetall, two leading European suppliers of defense technology are joining forces to realize ambitious projects. Together we want to set new standards and open the door to a new generation of state-of-the-art combat vehicles in and for Europe.”

Roberto Cingolani, CEO of Leonardo, emphasized the strategic importance of the joint venture. “Technology and industrial synergies between Leonardo and Rheinmetall are a unique opportunity to develop state-of-the-art Main Battle Tanks and Infantry Vehicles. We consider this agreement a fundamental contribution to the creation of a European defense space.”

The new tanks and infantry vehicles will not only enhance the capabilities of the Italian Army but also lay the groundwork for a future European Main Ground Combat System (MGCS), in collaboration with French and German partners. This initiative aims to streamline defense operations across European borders and strengthen collective security measures.

Under the terms of the MoU, Leonardo will be responsible for developing and producing mission systems, electronics suites, and weapons integration according to the specifications of the Italian client. Rheinmetall’s advanced technologies, including the recently developed Panther MBT and Lynx IFV models, will form the foundation for these programs.

Furthermore, Italy will host final assembly lines, homologation testing, and logistical support activities, ensuring a significant 60% workshare within the joint venture. This decision underscores Italy’s pivotal role in the manufacturing and deployment of next-generation defense systems aimed at meeting both national and international defense needs.

The collaboration between Leonardo and Rheinmetall comes at a critical time when European countries are ramping up their defense capabilities in response to heightened security threats and geopolitical instability, particularly in Eastern Europe following Russia’s invasion of Ukraine. The joint venture not only strengthens Europe’s industrial base but also positions it as a key player in global defense technology markets.

Earlier discussions between Leonardo and the Franco-German consortium KNDS regarding tank production had faltered, but this new alliance with Rheinmetall signifies a renewed commitment to advancing European defense cooperation. The move also aligns with Leonardo’s broader strategy to forge alliances within Europe and create regional defense champions capable of competing on a global scale.

Rheinmetall is set to make record sales this year amid a surge in defense spending across Europe. Reports indicate that the Italian government is poised to procure hundreds of Lynx armored fighting vehicles and Panther main battle tanks over 15 years, marking one of Rheinmetall’s largest-ever contracts.

As regulatory approvals from European authorities are awaited on the deal, including the European Commission and national competition authorities, the joint venture between Leonardo and Rheinmetall is expected to catalyze innovation in defense technology and strengthen Europe’s collective security architecture for years to come.