German Federal Cartel Office gives go-ahead to joint venture between Rheinmetall and Ukrainian Defence Industry.

In May 2023, the strategic partnership between Rheinmetall and Ukraine's state-owned Ukrainian Defence Industry group (UDI), formerly known as Ukroboronprom, has reached a significant milestone. On September 28, Germany's Federal Cartel Office, Bundeskartellamt, granted approval for the establishment of a collaborative venture between Rheinmetall Landsysteme GmbH and UDI in Kyiv. The necessary clearances from other relevant authorities have been sought and are anticipated to be granted shortly.
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Leopard 1A5. In its initial stages, the collaboration will focus on the maintenance and repair of vehicles transferred to Ukraine under Germany's multilateral "Ringtausch" equipment exchange program, as well as those directly supplied by Germany to Ukraine (Picture source: KMW)

The joint venture will be headquartered in Kyiv and will be involved in various activities, including service and maintenance, as well as the assembly, production, and advancement of military vehicles. Initially, its operations will be exclusive to Ukraine, with no concerns of competitive overlap in Germany, as confirmed by the Bundeskartellamt, which expedited the approval process within just one month.

This cooperation between Rheinmetall and the Ukrainian defense industry aims to fortify Ukraine's defense sector, consequently enhancing the nation's overall security by progressively developing shared capabilities in defense technology within Ukraine.

Under the terms of the agreement, Ukraine stands to gain through extensive technology transfers, the establishment of domestic defense technology capabilities, increased local value addition, and expedited deliveries of military equipment from Germany.

In its initial stages, the collaboration will focus on the maintenance and repair of vehicles transferred to Ukraine under Germany's multilateral "Ringtausch" equipment exchange program, as well as those directly supplied by Germany to Ukraine.

In the subsequent phases, based on a comprehensive technology transfer, the partners in this cooperation intend to jointly manufacture selected Rheinmetall products within Ukraine. Looking forward, the collaboration between Rheinmetall and UDI may extend to the joint development of military systems involving teams of Ukrainian and German specialists, with potential for subsequent export by Ukraine.

Defense News September 2023