Largest Contract Awarded for Artillery Purchase to Rheinmetall
Rheinmetall Denel Munition (RDM), the South African subsidiary of German defense company Rheinmetall, has announced a significant multi-year contract worth several hundred million euros with a European NATO country for 155mm artillery ammunition. This deal, booked in the second quarter of 2025, marks the largest in RDM's history and will see deliveries commence this year, continuing through 2027.
The contract involves the supply of 155mm projectiles from the Assegai family and bimodular propelling charges. These munitions offer a range capability of over 40,000 meters, ensuring optimal performance and precision in target impact. They will be integrated into the customer's existing artillery weapon systems, enhancing operational capabilities.
The Assegai ammunition family is rapidly expanding globally, already in use by multiple nations. To meet the growing demand, Rheinmetall is expanding its manufacturing capacity, targeting production of approximately 1.5 million shells annually by 2027.
This contract underscores Rheinmetall’s pivotal role in strengthening NATO allies' defense capabilities amidst evolving geopolitical landscapes. The company's investment in facility upgrades and new production lines since 2022 reflects its commitment to meeting the rising global demand for modern 155mm artillery ammunition.
The contract also supports the South African defense industry by employing over 2,500 workers, contributing to economic growth.
Analysts are becoming increasingly bullish on Rheinmetall, with target prices being raised. The company is not only supplying 155mm artillery ammunition but also combat jet parts, in addition to its existing offerings. Rheinmetall shares have gained nearly one percent, reaching up to 1,776 euros.
The order for Assegai family projectiles is supplemented by an order for bimodal propellant charges from an international customer. Other companies in the industry, such as Hensoldt and Renk, are also seeing growth, but at a slower pace compared to Rheinmetall.
Rheinmetall has recently secured a new record deal worth 25 billion euros for tanks, further underscoring its strategic importance in the defense industry. The combined value of these contracts is several hundred million euros.
Invested shareholders of Rheinmetall are letting their profits run, indicating confidence in the company's performance. The South Africans are currently working on improving the rocket motor of the conventional 155mm Assegai projectiles.
Rheinmetall is also involved in a secret project in the USA, although further details about this project are not provided. The upward trend in Rheinmetall shares is being supported by a friendly DAX environment and a target price increase by JPMorgan.
Shareholders of Rheinmetall are benefiting from the new orders, as the stock continues to perform well. The proven Assegai artillery family can be fired from all NATO-STANAG-compatible artillery systems, including the Panzerhaubitze 2000, for which Rheinmetall supplies the weapon system, including the L52 cannon.
Moreover, the South Africans are developing a new artillery system with a range exceeding 155 kilometers, further expanding their capabilities in the defense industry.
The large contract with a European NATO country for 155mm artillery ammunition, including projectiles from the Assegai family and bimodular propelling charges, is significant for the aerospace and finance industries, as it will increase Rheinmetall's annual production capacity to 1.5 million shells by 2027, securing a lucrative deal worth several hundred million euros. This growth in the industry is boosting Rheinmetall's shares, with analysts becoming increasingly bullish and target prices being raised.
