Rheinmetall buys Expal Systems to expand ammunition production to meet booming orders
The completion of the acquisition by the German company on 1 August will help it to meet substantial contracts for ammunition that have been placed in the past 18 months as the war in Ukraine has continued.
The buy-out is worth €1.2 billion ($1.1 billion) and, according to the company statement, ‘[will] expand its position as an important supplier for NATO armed forces, systematically increasing its production capacity especially for artillery, mortar and medium calibre ammunition’.
‘[There is] a fast-growing market driven by increased demand for military equipment in countries around the globe and the acquisition provides Rheinmetall with swift access to greater production capacity, covering the entire ammunition production value-added chain, with multiple plants in Spain.’
Rheinmetall is a major supplier to the Ukrainian armed forces with large amounts of medium- and large-calibre ammunition, including 20mm automatic cannon rounds for the Marder IFV, and 105mm and 120mm tank ammunition for the Leopard 1 and Leopard 2 MBTs. In addition, a first lot of 35mm ammunition for the Gepard anti-aircraft tank will soon be ready for shipment.
In acquiring Expal, Rheinmetall aims to secure and strengthen its core business in weapons, ammunition and propellants. The current Expal Systems product portfolio encompasses artillery ammunition, mortar and medium-calibre rounds as well as fuses and rocket propulsion systems.
In mid-July Rheinmetall signed a €1.3 billion ($1.4 billion) framework contract with the German Armed Forces to supply several hundred thousand shells, fuses and propelling charges and signed a €127 million ($139 million) contract for a first call of shells with deliveries expected soon.
Shortly before that, it was announced that the German Armed Forces has expanded its framework agreement with Rheinmetall for tank ammunition.
The order includes ammunition for both German and Ukrainian armed forces. Under the agreement the German Army had expanded a deal to provide tank munition to a value of €4 billion ($4.3 billion) and a first call-off of ammunition worth €309 million came immediately after the contract was signed.
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