The German armaments group Rheinmetall is positioning itself for a major order worth billions of euros from Italy for the delivery of hundreds of tanks and other armoured vehicles.
The Düsseldorf-based company intends to set up a joint venture with the Italian armaments giant Leonardo. Both companies have now signed a letter of intent.
Rheinmetall and Leonardo are two of the largest defence companies in Europe, with order books filled by the war in Ukraine and conflicts in other regions.
The two companies will each hold a 50% stake in the joint venture, which will develop a main battle tank and an infantry fighting vehicle. The latter is said to be a version of Rheinmetall's Lynx infantry fighting vehicle, while the main battle tank is likely to be the Panther, which is not yet ready for series production.
The new joint venture is expected to land an order from Italy, which according to media reports, could have a volume of €20 billion ($21.5 billion) and a term of more than ten years.
"Together, we want to open the door to a new generation of state-of-the-art combat vehicles in and for Europe," explained Rheinmetall CEO Armin Papperger.
"We see this agreement as a fundamental contribution to the creation of a common European defence area," said Leonardo CEO Roberto Cingaloni.
Rheinmetall did not provide any information on the potential number of units that the planned joint venture will be targeting, but the German newspaper Handelsblatt has reported that more than 550 tanks are involved, including more than 200 Panthers and at least 350 Lynx.
Rheinmetall already has three subsidiaries with around 1,400 employees at five locations in Italy. The letter of intent for the joint venture must still be approved by the relevant regulatory authorities before it can be implemented.