Rheinmetall aims for rapid growth in its naval business, established at the beginning of the year to round out its portfolio. The Dusseldorf-based group recently acquired the naval division of the Luerssen shipyard (NVL) for a preliminary purchase price of approximately 1.5 billion euros, forging a multi-billion-euro maritime unit. 'In the maritime sector, Rheinmetall now covers the full spectrum from the development and production of unmanned naval vehicles to the construction of corvettes and frigates', the DAX-listed group stated in its quarterly report. Papperger announced that Rheinmetall expects 'large-scale orders' for the new division in the second quarter, adding, 'We have set very ambitious goals in this area'. Rheinmetall is also eyeing a shipyard in Romania.
TKMS had already submitted a bid for the company formerly known as Howaldtswerke-Deutsche Werft. A spokesperson confirmed the group is in talks with GNYK's owners. 'For us, this would be an opportunity, but not a must-have', TKMS CEO Oliver Burkhard previously stated regarding the subsidiary of the French family-owned group CMN Naval. No immediate comment was available from the owner, CMN Naval.
Rheinmetall is significantly larger than TKMS, which specializes in submarines and ships. The latter generated revenue of 2.2 billion euros in the 2024/25 fiscal year, employing around 9,000 people. In 2025, Rheinmetall recorded nearly ten billion euros in revenue with approximately 34,000 employees. The order backlog in its naval business totaled 5.5 billion euros at the end of March. Both companies view themselves on a growth trajectory.
Following the Russian invasion of Ukraine, the Western defense industry is being called upon to strengthen armed forces. Ammunition and missiles are also urgently needed in light of the conflict involving Iran. The shift away from NATO by the U.S. administration under President Donald Trump and the planned withdrawal of U.S. troops from Germany are also expected to further stimulate European demand for weapons and ammunition.
However, Rheinmetall progressed more slowly than expected in the first quarter. While revenue rose eight percent to 1.94 billion euros from January to March, analysts had anticipated an average of 2.3 billion euros. Operating profit climbed 17 percent to 224 million euros. CEO Papperger is now hoping for a recovery in the current second quarter and is maintaining his full-year forecasts. 'Overall, we are well on track to achieve our ambitious annual targets'. Investors, however, gave Rheinmetall the cold shoulder. The shares fell by around three percent, making them among the biggest losers on the benchmark DAX index.
To manage this rapid growth, Papperger is relying on alliances with other groups alongside acquisitions, such as the partnership with Italy's Leonardo for tank production. However, not everything appears to be running smoothly with the Italian partner: the acquisition of Iveco's military truck business is not yet finalized. While Rheinmetall is in exclusive talks with Leonardo, the new parent of Iveco, the Italians recently stated that a sale to Rheinmetall was 'only one option' for the business.
(Report by Matthias Inverardi and Miranda Murray, edited by Ralf Banser. For inquiries, please contact our editorial office at berlin.newsroom@thomsonreuters.com (for politics and economics) or frankfurt.newsroom@thomsonreuters.com (for companies and markets).)
