Rheinmetall Rides a €3.9bn French Takeover Wave While Battling a German Frigate Setback
Published on 07/06/2026 at 14:35 | Redaktion boerse-global.de
A blockbuster defence deal in France sent a powerful signal through Europe’s arms sector on Monday, lifting Rheinmetall to the top of the DAX even as the group wrestles with a cancelled frigate programme that has punctured its second-quarter targets. Rheinmetall shares closed at €1,111.80, up 1.35% on the day, after Thales agreed to buy Groupe Gorgé’s stake in Exail for €134 a share – a 44% premium that values the French specialist at roughly €3.9bn.
Investors interpreted the rich takeover price as evidence that European defence technology may be undervalued. The read?across boosted Rheinmetall alongside peers such as TKMS, Renk and Hensoldt. Yet the euphoria masks a more complicated backdrop: Germany’s decision to scrap the F126 frigate project has forced Rheinmetall to lower its Q2 2026 order?intake forecast from an original target of more than €20bn to a low double?digit billion figure.
The cancellation could also shave up to €300m from 2026 revenue if no compensating measures are found. Management, however, insists the full?year guidance remains intact, with sales growth still expected to exceed 60%. The order backlog, currently around €73bn, is projected to swell to roughly €135bn by year?end.
Broader industry data provided a tailwind on Monday. Germany’s Federal Statistical Office reported that industrial orders rose 1.9% in May versus the previous month, above the 1.5% consensus. A standout category – “other vehicle construction”, which covers military vehicles, aircraft and ships – surged 85% month?on?month, driven largely by major defence contracts. While Rheinmetall is not the sole beneficiary, the figures underscore the investment trend supporting the entire sector.
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That trend is reinforced by Berlin’s long?term budget planning. Germany has set aside €95bn for defence in 2025, with the figure climbing to roughly €152bn by 2029. Finance Minister Lars Klingbeil defended the higher borrowing needed for 2027, a year in which the defence ministry is earmarking €105.8bn plus another €27.5bn from the Bundeswehr’s special fund. The trajectory to 2030 targets a defence budget of €179.9bn.
Rheinmetall chief executive Armin Papperger took the opportunity to settle old scores, accusing former chancellor Angela Merkel of deliberately weakening the domestic industry by telling executives that Germany did not need its own arms sector and would rely on the US. Since then, the group has ramped up capacity dramatically: annual production of artillery shells has climbed from 70,000 to one million units. Papperger is now calling for binding contracts and faster procurement to make those investments pay off.
A potential order from Belgium could help offset the F126 hole. Brussels is reportedly planning to buy air?defence systems worth €3.1bn, with Rheinmetall supplying 20 Skyranger short?range units. The Belgian minister council still needs to approve the deal, and an official announcement could come during the NATO summit in Ankara on 7?8 July – an event that has also drawn attention to supply?chain bottlenecks flagged by Secretary?General Mark Rutte.
Rheinmetall at a turning point? This analysis reveals what investors need to know now.
On the charts, Rheinmetall’s recovery from recent lows is real but fragile. The stock has gained 14.32% over the past seven days, though it remains 6.57% lower on a one?month view and 30.58% in the red year?to?date. The RSI stands at 48.4, a neutral reading that suggests neither overbought nor oversold conditions. With the 52?week high of €1,995 from September 2025 still 44.27% away and the low of €902.50 reached only at the end of June, the shares have room to run – provided the Belgian deal materialises and Berlin’s long?term spending commitments stay on track.
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