If you thought we were done with European defense, think again. In a plot twist few expected, German defense behemoth Rheinmetall is getting into the shipbuilding game. Yesterday, the company announced that it’s snapping up Naval Vessels Lürssen (NVL), the military division of the Lürssen Group (which also builds fancy yachts).
This comes just a few weeks after NVL announced a partnership with drone boat maker Kraken, which said it’d use NVL’s shipbuilding capabilities to scale across Europe. Wonder if we’ll be seeing any Rheinmetall-flavored USVs anytime soon.
What’s that sound? Could it be the wave of long-awaited industry consolidation finally arriving?
Building blocks: As we’ve covered before, NVL’s portfolio boasts a bunch of shipbuilding might, especially in Germany:
- Four shipyards along the northern German coast
- Contracts for the German Navy (including corvettes and frigates)
- More contracts for offshore patrol vessels for the Australian Navy and patrol ships for the Bulgarian Navy
On the ground: Rheinmetall, on the other hand, is mainly known for landpower—tanks, armored vehicles, and ammunition. While it does make some naval systems already, this purchase is a huge leap into the world of seapower. CEO Armin Papperger said that with the purchase, Rheinmetall will become “an integrated naval powerhouse.”
That’s a pretty big goal for a company that has never really made ships before. To build ships, you need big yards, smart people, and a hell of a lot of infrastructure, so buying a ready-made operation is a smart choice (especially when you consider you’ll have to fulfill all those contracts coming along with the deal). As the age-old saying goes: To become a shipbuilder, you have to, like, buy a shipbuilder.
In the water: Why go naval? Because it’s the place to be, per Rheinmetall. “Rheinmetall intends to meet the massive increase in demand from naval forces and rising procurement budgets with high-performance system solutions,” the company said in a statement on the acquisition. Translation: there’s a lot of money in ships right now, and the company wants to get in on it.
Nice to see that at least Rheinmetall got the Zeitenwende memo.