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Ukraine conflict: German cartel office approves Rheinmetall-Ukrainian Defence Industry joint venture

Rheinmetall CEO Armin Papperger has spoken of setting up a plant in Ukraine to produce the KF51 Panther tank, shown at Eurosatory 2022. (Janes/Sonny Butterworth)

The Bundeskartellamt, Germany's Federal Cartel Office, approved Rheinmetall's joint venture with the Ukrainian Defence Industry (UDI) group, formerly Ukroboronprom, the office and German company announced in separate press releases on 28 September.

The Bundeskartellamt said the joint venture would repair, conduct maintenance, assemble, produce, and develop military vehicles.

It will be based in Kyiv and initially operate only in Ukraine. The Bundeskartellamt found no competitive overlaps in Germany and no indications of competition concerns and approved the merger within a month.

Rheinmetall said co-operation between it and UDI aims to strengthen Ukraine's defence sector and ultimately the country's national security by gradually building joint capabilities in defence technology in Ukraine. The German company added that Ukraine would benefit from comprehensive technology transfer, from building up its defence technology capacities at home, from additional local added value, and from prompt deliveries of military equipment from Germany.

As a first step, co-operation will focus on the maintenance and repair of vehicles transferred to Ukraine from Germany or from countries that have been backfilled with German equipment. In later phases, technology transfer will be used to jointly produce selected Rheinmetall products in Ukraine. The German company also envisages the joint development with UDI of military systems by teams of Ukrainian and German specialists for export from Ukraine.

Rheinmetall is expecting further approvals required for the merger to take place soon but declined to specify which ones when queried by Janes.

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