Rheinmetall is taking over the military division of the Bremen-based Lürssen Group. This marks the defence company’s first entry into the construction of warships such as frigates and corvettes. The company, which currently generates most of its revenue from artillery ammunition, is developing into a full-service provider for the German armed forces and allied armies.

The Düsseldorf-based group announced that it had agreed with Lürssen on the key points for the acquisition of Naval Vessels Lürssen (NVL). Rheinmetall plans to take over all NVL sites and employees, integrating them as a separate division within the Rheinmetall Group and further developing them. The Lürssen Group will henceforth focus exclusively on the construction of civilian megayachts. Owner Friedrich Lürßen stated that „in light of the increased threat environment, consolidation within the defence industry is necessary.“

The transaction is expected to be completed in early 2026, but is subject to approval by antitrust authorities. The purchase price has been kept confidential by agreement with the Lürssen family.

In an analyst conference on Monday, Rheinmetall CEO Armin Papperger stated that the company paid 4.5 times the operating profit (Ebitda) for NVL. Going forward, NVL’s Ebitda is expected to be around 300 million euros, and its Ebitda margin is projected to rise from about 10% to 15% in the medium term. NVL’s revenue, currently generated by roughly 2,000 employees, is expected to grow from 1.3 billion euros today to around 5 billion euros by 2030. According to financial circles, these figures imply a purchase price of approximately 1.35 billion euros. Papperger also stated that Rheinmetall does not plan a capital increase to finance the deal.

Rheinmetall’s stock rose to an all-time high on the news. The market capitalisation of around 87 billion euros is higher than that of Siemens Energy, Munich Re, or Deutsche Bank.

With the acquisition of the shipbuilder, Rheinmetall aims to diversify, develop the naval sector as an additional business area, and strengthen its position as a leading provider of defence technology in Germany and Europe. So far, the group has not built its own ships but conducts business with navies, for example through naval guns and laser modules. Since the start of Russia’s war against Ukraine in February 2022, Rheinmetall’s stock has increased roughly twentyfold.

Rheinmetall is one of the main arms suppliers to Ukraine and has been a partner of naval forces for many years, but until now primarily as a supplier of items such as simulation technology and protection systems. NVL is the former military division Lürssen Defence and was separated from the yacht division in 2021. In Germany, NVL includes four shipyards: Peene-Werft in Wolgast (Mecklenburg-Western Pomerania), parts of Blohm+Voss, Norderwerft in Hamburg, and Neue Jadewerft in Wilhelmshaven. Additional sites are located in Bulgaria, Croatia, Egypt, and Brunei. Blohm+Voss is collaborating with the Dutch Damen Schelde Naval Shipbuilding on six F126 frigates for the German Navy, and there are production delays. Rheinmetall has 40,000 employees across 174 sites and generated around 9.8 billion euros in revenue in 2024.