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German defence supplier Rheinmetall acquired the Spanish ammunition manufacturer, Expal Systems SAU, in a €1.2bn ($1.3bn) deal on 1 August 2023.

Rheinmetall acquisition expands its position as one of the largest ammunition and armament providers to Nato armed forces. The deal will systematically increase its production capacity: especially for artillery, mortar, and medium calibre munitions.

Moving forward, the subsidiary will operate under the name “Rheinmetall Expal Munitions, SAU.”

Worldwide ammunition production shortage

In a world where countries are now rushing to mobilise their war stocks, the acquisition provides Rheinmetall with swift access to greater production capacity, covering the entire ammunition production value-added chain, with multiple plants in Spain and a demilitarisation and soil remediation business in the United States.

Already, Rheinmetall has supplied the Ukrainian armed forces with large amounts of medium and large calibre munitions, including 20mm automatic cannon rounds for the 40 Marder infantry fighting vehicles the German Bundeswehr supplied Ukraine, and 105mm and 120mm tank ammunition for the Leopard 1 and Leopard 2. In addition, a first lot of 35mm ammunition for the Gepard anti-aircraft tank will soon be ready for shipment.

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Given the likelihood of strong future demand in many countries, the acquisition places Rheinmetall in a favourable position to respond to complex new ammunition procurement requirements.