Italy Poised to Finalize $21.6 Billion Combat Vehicle Deal with Rheinmetall

Italy is on the brink of finalizing a massive defense contract with German arms manufacturer Rheinmetall, valued at approximately €20 billion ($21.6 billion). This landmark deal, expected to be officially signed soon, marks a significant step in bolstering Italy's military capabilities and deepening its defense ties with Germany.

The deal, reported by the German newspaper “Handelsblatt,” involves the procurement of 350 Lynx infantry fighting vehicles and over 200 Panther tanks. These state-of-the-art combat vehicles will significantly enhance the operational readiness and technological edge of the Italian Army.

A key feature of the contract is its comprehensive scope, spanning 15 years and encompassing not only the acquisition of vehicles but also extensive maintenance and technical support. The agreement also includes auxiliary vehicles for the recovery of damaged tanks, ensuring sustained operational capability.

The strategic partnership between Rheinmetall and Italy was further solidified through a Memorandum of Understanding (MoU) signed with Italian defense firm Leonardo. This MoU establishes a 50:50 joint venture aimed at developing and commercializing new Main Battle Tanks (MBTs) and the Lynx Platform for the Armoured Infantry Combat System (AICS) within the Italian Army’s ground systems programs.

Armin Papperger, CEO of Rheinmetall AG, expressed enthusiasm about the collaboration, stating, “With 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, echoed this sentiment, highlighting the technological and industrial synergies between the two companies. He described the agreement as a fundamental contribution to creating a European defense space, emphasizing its importance for future developments in European defense capabilities.

The joint venture, headquartered in Italy, will serve as the Lead System Integrator, prime contractor, and system integrator for both the Italian MBT and AICS programs. Leonardo will be responsible for developing and producing mission systems, electronics suites, and weapons integration tailored to the Italian client’s requirements. These technologies will also form the foundation for future European Main Ground Combat System (MGCS) developments and international exports.

To ensure a substantial Italian contribution, final assembly lines, homologation testing, delivery activities, and logistic support will be based in Italy. This setup guarantees an Italian workshare of 60%, fostering local industry involvement and expertise.

The implementation of the MoU is subject to approval by the European Commission and respective national competition authorities. Once finalized, this deal will not only strengthen Italy’s defense capabilities but also reinforce European defense collaboration, setting new standards in military technology and innovation.