ALBAWABA - In an effort to strengthen its position in the biggest defense sector in the world, German arms manufacturer Rheinmetall, an essential provider of weaponry to Ukraine, said on Wednesday that it had purchased US vehicle specialist Loc Performance for $950 million.
After the purchase was originally disclosed on Tuesday evening, Rheinmetall's shares increased 1% on Wednesday in a bid to increase the company's prospects of securing orders valued at billions of dollars, as reported by Reuters.
With over a thousand workers, Loc has factories in Ohio and Michigan where it produces armor and vehicle parts for both military and civilian clients. The firm also produces rubber goods, armour items, track systems, drivetrains, suspensions, and other vehicle components.
With its existing American factories and its collaboration with Lockheed Martin, Rheinmetall anticipates that the acquisition will provide it a competitive advantage in bidding for two significant U.S. military contracts: the CTT project and the XM30 infantry fighting vehicle (IFV) program.
As one of only two XM30 program partners, Rheinmetall is developing the next generation of tanks to replace the Bradley IFV, with an estimated cost of around 45 billion euros ($50 billion) for about 4,000 vehicles, according to Reuters. In addition, it is taking part in the Common Tactical Truck (CTT) initiative, which is valued around $16 billion and involves 40,000 military vehicles.
“We are making this investment because we have a clear strategy for growth and the United States will be an important core market for us in the coming years,” said Armin Papperger, CEO of Rheinmetall AG, adding that “The acquisition of Loc Performance proves that we are consistently focussing on success in the USA and want to expand our share of the large market volume.”
From his side, Jason Atkinson, CEO of Loc Performance stated that “the significant engineering capabilities of American Rheinmetall Vehicles and the next-generation technologies that are part of the exceptional global Rheinmetall Group are a great fit with Loc Performance's 53 years of manufacturing experience in the United States.”
