Rheinmetall Sinks 17% After Germany Scraps €12.8 Billion F126 Frigate Plan
Updated
Updated · CNBC · Jun 24
Rheinmetall Sinks 17% After Germany Scraps €12.8 Billion F126 Frigate Plan
3 articles · Updated · CNBC · Jun 24
Summary
Rheinmetall fell as much as 17.3% in Wednesday trading—its worst day since 1989—after reports Germany will drop the six-ship F126 program and replace it with eight smaller MEKO A-200 frigates from TKMS.
The shift threatens a contract worth up to €12.8 billion that Rheinmetall had been expected to lead, while analysts now say its naval sales target of €5 billion by 2030 may be cut roughly in half.
TKMS rose 15% on the expected order, but the selloff spread across Europe: Hensoldt lost 5.1%, Renk 5.8%, Leonardo 4.4%, Saab 3.5%, and the Stoxx Europe Aerospace & Defense ETF slipped 1.9%.
The move deepens doubts over how much of Europe’s promised military spending will translate into contracts, even as Germany aims for the continent’s strongest conventional army by 2039 and NATO allies target defense outlays of 5% of GDP.