Germany's Rheinmetall to buy US company worth nearly $1 billion

Rheinmetall, Germany's largest defence contractor, has agreed to acquire US military vehicle parts manufacturer Loc Performance for $950 million.

This acquisition aims to bolster Rheinmetall’s position in the US defence market, targeting significant contracts with the US Army, Caliber.Az informs per foreign media.

Loc Performance, based in Michigan, specializes in components such as track systems and road wheels for combat vehicles. The acquisition aligns with Rheinmetall’s strategy to secure high-volume orders, including the XM30 combat vehicle and the Common Tactical Truck programs, potentially worth over $60 billion combined.

Rheinmetall CEO Armin Papperger highlighted the strategic importance of the US market, stating, “Everything speaks in favour of this acquisition.” The deal positions Rheinmetall to better compete for major US defence contracts, including a $45 billion project to replace the M2 Bradley infantry fighting vehicle and a $16 billion contract for tactical trucks.

The acquisition follows a recent increase in Rheinmetall’s share price and its expansion amid rising global defence spending. Loc Performance, founded in 1971, operates four facilities in Michigan and Ohio and employs around 1,000 people. The deal is expected to enhance Rheinmetall’s manufacturing capabilities for upcoming major orders.

The announcement coincides with other significant defence industry moves, including MNC Capital's higher bid for Vista Outdoor and the completion of regulatory approvals for the acquisition of Vista’s ammunition business.