Volkswacht Bodensee - Defence giant Rheinmetall makes offer for further shipyard

Rheinmetall had made a non-binding offer to acquire German Naval Yards in the first quarter of the year, it said in a presentation without disclosing the price.

German Naval Yards is currently part of French shipbuilding firm CMN Naval.

Another German ship and submarine maker, Thyssenkrupp Marine Systems, had itself made a competing offer for German Naval Yards in January.

Rheinmetall has grown rapidly in recent years as European military spending has surged.

The group is also seen as an increasingly powerful political force in Berlin, and has expanded into domains including attack drones and ships beyond the tank guns and ammunition it has traditionally specialised in.

In April, Rheinmetall said it would start making cruise missiles for the first time in a joint venture with Dutch firm Destinus.

Rheinmetall last September struck a deal to buy a separate German shipbuilder, Naval Vessels Luerssen (NVL), as part of its push into warship production.

Reporting first-quarter results that saw Rheinmetall include its "Naval Systems" segment for the first time, CEO Armin Papperger said maritime business was a growth area for the group.

"With the successful acquisition of Naval Systems, we have entered a new market segment where we are also generating profitable growth," he said.

"For the second quarter of 2026 in particular, we expect stronger growth in sales and order intake, with large-volume orders in the naval business and in the vehicles business," he added.

- Troubled warship project -

Papperger said the company was negotiating with the German defence ministry to take over construction of a new series of warships, called the F126, for the country's navy.

Germany's biggest warship order in years, worth a reported 10 billion euros ($12 billion), it was originally awarded to Dutch group Damen Naval.

But it has been beset by delays, and Berlin is now weighing handing control of the project to Rheinmetall.

Rheinmetall had conducted "technical due diligence... and we found that we are able to sort it out," Papperger told reporters Thursday.

The Financial Times reported this week that Rheinmetall is seeking 12 billion euros to take over the project.

Papperger refused to give an exact number, but added: "We always said it should be a program which is more than 10 billion, and we have to ask for that."

Rheinmetall's order backlog expanded to a record 73 billion euros ($86 billion), the firm said, including 5.5 billion euros at Naval Systems.

Sales increased eight percent on the same time last year to 1.9 billion euros, generating core profit of 224 million euros.

Rheinmetall expects sales of between 14.0 and 14.5 billion euros for 2026, up from 9.9 billion euros last year.

M.Betschart--VB