Rheinmetall receives a $4 billion contract from Europe. Shares of the concern soared
Photo: Schakal / Wikipedia

German defense concern Rheinmetall has announced a new major order for Artec worth €3.41 billion ($3.96 billion) from the European organization OCCAR, sending the company's shares soaring. About writes The Wall Street Journal.

Artec, a joint venture between Rheinmetall and KNDS Germany, was awarded a contract worth €3.41 billion. Rheinmetall's share of this amount is almost €3 billion.

Following the announcement of the deal on Monday, October 20, Rheinmetall's shares on the Frankfurt Stock Exchange rose 5% to EUR 1,744.5. Shares of other defense companies in Germany and Europe also rose.

Under the terms of the contract, Artec will supply 150 Schakal infantry fighting vehicles to the German army and another 72 to the Dutch armed forces. In addition, the contract provides for an option to supply another 248 vehicles.

The order comes amid a large-scale increase in defense budgets in Europe.

Rheinmetall's shares have more than doubled since the beginning of the year, and other arms manufacturers are also showing significant growth, including Italian Leonardo and Fincantieri, British BAE Systems and Babcock International, and French Thales and Dassault Aviation.

It is estimated that Germany alone will spend hundreds of billions of euros in additional defense spending in the coming years. European leaders want at least 50% of new defense contracts to remain on the continent rather than going to U.S. corporations.

J.P. Morgan analysts David Perry and Lucy Fitzgerald note that due to the protracted nature of the Russian-Ukrainian war, the European defense sector will continue to benefit.