Joint venture between Rheinmetall and Ukrainian Defense Industry cleared

The Bundeskartellamt has cleared the creation of a joint venture in Ukraine between Rheinmetall Landsysteme GmbH, Unterlüß, and Ukrainian Defense Industry (UDI), Kyiv. Rheinmetall is a globally active technology group operating in the defence industry and the automotive components market. UDI is a Ukrainian state-owned company in the defence sector with around 67,000 employees and is controlled by the Cabinet of Ministers of Ukraine.

Andreas Mundt, President of the Bundeskartellamt: “Given the current geopolitical situation, there is considerable movement in the defence industry. The joint venture between Rheinmetall and Ukrainian Defense Industry which the Bundeskartellamt was to assess is to be based in Ukraine and will operate in the construction and maintenance of military vehicles. The project does not result in any overlaps in terms of competition in Germany. We have cleared the project quickly.”

The joint venture is to be based in Kyiv and will operate in the provision of service and maintenance, assembly, manufacturing and development of military vehicles. It will for now exclusively be active on Ukrainian territory. There are no overlaps in terms of competition in Germany, nor are there any indications suggesting competition concerns would arise. The Bundeskartellamt has cleared the merger plans within the one-month deadline of first-phase merger control.

Rheinmetall is known as a producer of a range of (armoured) military vehicles (including the Leopard battle tank, the Puma infantry fighting vehicle and the Fuchs wheeled armoured vehicles). UDI comprises various companies operating in the defence industry (production of arms and military equipment).

The Bundeskartellamt has already dealt with questions regarding access to maintenance of military vehicles in Germany and, for instance, safeguarded competition in the maintenance of “GTK Boxer” wheeled armoured transport vehicles (press release of 13 March 2023).