Defense sector stocks experiences positive start to the week with prospective contracts for Rheinmetall, Leonardo, and other firms on the horizon
Rheinmetall Expands into Marine Business with NVL Acquisition
Rheinmetall, a German defence company, has made a significant move into the marine business by acquiring the military division of NVL's shipyard group. The purchase price, excluding debt, is expected to be between 1.5 and 2.0 billion euros.
The deal, which had been hinted at in recent weeks, marks a strategic move for Rheinmetall as it seeks to diversify its portfolio. However, opinions among analysts are divided regarding the strategic soundness and potential risks of the acquisition.
Holger Schmidt from DZ Bank considers the purchase strategically sound but warns that shipbuilding carries greater risks due to its long project times. On the other hand, Christian Cohrs of Warburg Research expresses concern that the corporate strategy could be diluted by the acquisition, and doubts that it is the best buyer for the marine business, which he considers complex and not part of Rheinmetall's core DNA.
Meanwhile, Jefferies analyst Chloe Lemarie expects Rheinmetall to increase NVL's double-digit margin to the mid-teens range, including synergies.
Elsewhere in the defence sector, other stocks like Leonardo also gained ground at the start of the week. Shares of Rheinmetall itself reached a new record high of 1,949 euros in early trading. DER AKTIONÄR remains optimistic about Rheinmetall and sees prices above 2,000 euros as realistic in the near future.
In a separate development, European aerospace companies Airbus, Leonardo, and Thales are reportedly planning to form a European satellite company. The joint venture aims to compete with US company SpaceX and Chinese satellite providers. Renewed media reports suggest that this satellite alliance could be finalized by the end of the year.
However, no further details about this potential alliance have been provided. The companies involved have yet to comment on the matter.
It is important to note that the author holds direct positions in the financial instruments mentioned in this publication or related derivatives that could benefit from the price development resulting from the publication: Rheinmetall, Leonardo.
As always, investors are advised to conduct their own research or consult with a financial advisor before making investment decisions.
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