Rheinmetall AG, the German defense giant, is set to acquire U.S.-based military equipment manufacturer Loc Performance Products LLC for $950 million.
The acquisition comes as Rheinmetall seeks to expand its footprint in the world’s largest defense market, driven by a surge in global arms demand following Russia’s invasion of Ukraine.
The deal was first reported by Bloomberg.
Loc Performance Products, known for its production of track systems for tanks and agricultural machinery, as well as hulls for combat platforms, will significantly enhance Rheinmetall’s manufacturing capabilities in the United States. The acquisition aligns with Rheinmetall’s strategy to strengthen its position in a market with an estimated potential of over $60 billion in military vehicle orders.
“The U.S. military vehicle market has a total order potential of more than $60 billion,” Rheinmetall stated, underscoring the strategic importance of this acquisition.
The acquisition of Loc will bring approximately 1,000 skilled workers into Rheinmetall’s workforce, according to the company. However, the deal remains subject to regulatory approval. On Wednesday, Rheinmetall’s shares rose by 2% during trading in Frankfurt, doubling their value over the past year, bringing the company’s market capitalization to €24.3 billion.
This move positions Rheinmetall to compete directly with industry leaders such as General Dynamics in the XM30 program, valued at over $60 billion, and Mack Defense, Navistar Defense, and Oshkosh Defense in the $16 billion Common Tactical Truck program. Loc Performance Products is already an established defense contractor, supplying components for existing U.S. Army combat vehicles, including Abrams tanks.