Rheinmetall secures €260 million contract for military logistics support

German arms company Rheinmetall announced on Wednesday that it has signed an agreement with the German Armed Forces (Bundeswehr) to provide logistical support during the redeployment of troops both at home and abroad.

Europe’s largest ammunition manufacturer said the framework agreement with the German army, worth €260 million ($271 million), is valid for three years and can be extended until the end of 2029.

Under the contract, Rheinmetall will provide specified services in line with national defense requirements and mutual defense obligations. The company is thus expanding its logistics support services for the redeployment of forces.

The order comes at a time of increased interest in European defense groups after US President Donald Trump urged Europe to increase investment in the sector, raising expectations of increased military spending.

Rheinmetall shares, which have risen nearly tenfold since the Ukraine war, rose 0.7% yesterday.

Rheinmetall said the deal is not limited to providing services to the Bundeswehr, but also covers allied armed forces such as NATO.

“Due to its central position in Europe, Germany is both a transit country and a logistical hub for collective defense. It therefore plays a key role in the redeployment of forces within NATO and the EU,” Rheinmetall said.

CEO Armin Papperger told Reuters last week that he expected the company to continue growing faster than previously thought, given the Trump administration’s calls for Europe to increase defense spending and take responsibility for its own security.

Papperger said increasing Germany’s defense budget to 2.5% or 3% of GDP from the current 2% would mean an annual defense investment of €60 billion to €70 billion.