Rheinmetall shares sink after Berlin axes warship deal, shifting orders to TKMS
Rheinmetall shares sink after Berlin axes warship deal, shifting orders to TKMS
ReutersWed, June 24, 2026 at 9:36 AM UTC
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Rheinmetall logo is seen in this illustration taken July 26, 2025. REUTERS/Dado Ruvic/Illustration
June 24 (Reuters) - Rheinmetall shares fell more than 16% on Wednesday after Germany's defence ministry scrapped a delayed F126 frigate programme that the company was the main contractor for.
By 0906 GMT, Rheinmetall was down 13% and headed for its sharpest daily fall ever, while shares in German shipbuilder TKMS jumped 9.8% and were set for their best day since April 2026, according to stock exchange data.
Der Spiegel and the Financial Times earlier reported that Defence Minister Boris Pistorius intended to pull out of the F126 project and instead focus on buying Meko-class frigates built by TKMS.
Germany's defence ministry confirmed it will terminate the F126 project. The ministry said the cost of continuing the programme after replacing original prime contractor Damen Schelde Naval Shipbuilding with Naval Vessels Luerssen, now owned by Rheinmetall, would have pushed the bill for six F126 ships to more than €18 billion, including a roughly €15.2 billion contract with NVL.
Rheinmetall declined to comment.
TKMS said in a statement it was pleased to be contributing to the strengthening of the German navy, adding it had already begun preparatory work in February, plans to deliver the first Meko A-200 frigate in 2029 and sees scope to involve other German yards if the option for four more ships is exercised.
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Since the F126 order was placed in 2020, more than €2 billion have been spent, Der Spiegel reported. Rheinmetall offered in May to take over the project for a total of €12.8 billion, the magazine said.
The defence ministry said in March it planned to buy four Meko A-200 frigates from TKMS as a stopgap to meet NATO anti-submarine commitments from 2028, with deliveries from end-2029.
On Wednesday it said it now aims to buy a total of eight Meko frigates "primarily for anti-submarine warfare", at about €6.3 billion for the first four and €5.3 billion for an option on four more if exercised by end-2026.
Rheinmetall CEO Armin Papperger said in May the group expected to sign the F126 deal in the second quarter.
Amid the complex rearmament efforts in Europe, where Berlin and Paris have scrapped their joint FCAS fighter jet project and their MGCS tank programme is running about a decade late, Franco-German tank maker KNDS on Wednesday set out plans for a dual Frankfurt-Paris IPO that sources told Reuters could value it at about €15 billion.
(Reporting by Emanuele Berro, Kirsti Knolle and Sabine Siebold and Matthias Inverardi; Editing by Christoph Steitz and Elaine Hardcastle)
Source: “AOL Breaking”
