Germany’s Bundeskartellamt has approved the creation of a joint venture between Rheinmetall AG and Leonardo S.p.A. The new entity, named Leonardo Rheinmetall Military Vehicles (LRMV), will be headquartered in Rome, Italy, and is set to compete for military vehicle contracts from the Italian Ministry of Defence.
LRMV will focus on providing armoured vehicles, including main battle tanks and infantry fighting vehicles. As part of the contract requirements, at least 60% of the value-added work must be carried out in Italy, positioning LRMV to fulfill this condition by leveraging local production capabilities.
Rheinmetall will contribute its expertise in military vehicle platforms, including the Panther main battle tank and the Lynx infantry fighting vehicle. Leonardo, on the other hand, will integrate its advanced defence electronics into the vehicles, complementing Rheinmetall’s vehicle systems. Rheinmetall’s established presence in Italy will assist in meeting the country’s local production requirements.
Andreas Mundt, President of the Bundeskartellamt, stated that the joint venture did not raise competition concerns due to the complementary nature of the companies’ operations. He noted that the collaboration was cleared swiftly, as neither company could independently meet the requirements of the Italian Ministry of Defence. Leonardo lacks the necessary vehicle platforms, while Rheinmetall would face challenges meeting the local production quotas.
This partnership reflects ongoing shifts in the European defence industry, where companies are increasingly collaborating to meet specific national and international requirements. The formation of LRMV strengthens the combined capabilities of Rheinmetall and Leonardo, allowing both to better compete for contracts in Italy’s strategic defence market.
In October 2024, Rheinmetall AG and Leonardo S.p.A. announced the formation of a 50:50 joint venture, Leonardo Rheinmetall Military Vehicles (LRMV), to create a European hub for the development and production of military combat vehicles. Based in Rome, with operational headquarters in La Spezia, the joint venture’s primary focus is the development of a new Italian main battle tank (MBT) and the Lynx platform for the Armoured Infantry Combat System (AICS) for the Italian army.
This partnership aims to meet Italy’s requirements for modernizing its military land systems, with at least 60% of the work to be carried out in Italy. The venture also expects significant export opportunities, with the development of various combat vehicle variants, including infantry fighting vehicles, anti-aircraft systems, and reconnaissance vehicles.
The Bundeskartellamt is Germany’s Federal Cartel Office, responsible for overseeing and regulating competition within the country. It ensures that market practices are in line with antitrust laws and evaluates business mergers and acquisitions to prevent anti-competitive behavior. The Bundeskartellamt’s approval of the Rheinmetall-Leonardo joint venture was necessary to ensure that the collaboration did not harm market competition in the defence industry.