Inside Rheinmetall's War: How Germany's Largest Defence Company Became Europe's Most Powerful

Rheinmetall has transformed from a niche armaments maker to Europe's dominant defence company in four years. Here is the story of how it happened and what comes next.

In February 2022, Rheinmetall had a market capitalization of approximately €7 billion and was best known in European business circles as a profitable but relatively unglamorous manufacturer of armoured vehicles, ammunition, and weapons systems. By March 2026, its market capitalization had exceeded €50 billion, making it the most valuable publicly traded defence company in Europe and one of the most valuable in the world.

The transformation was driven by one variable: Russia's invasion of Ukraine on February 24, 2022, which made European governments suddenly and urgently serious about defence spending in a way that no amount of NATO two-percent guidance had previously achieved.

Rheinmetall's CEO Armin Papperger saw the inflection point coming faster than almost anyone in his industry. In the weeks immediately following the invasion, he was already committed to a production capacity expansion programme that required significant capital investment and carried significant risk if the political momentum for European rearmament reversed. It did not reverse.

The company has since expanded its production capacity for 155mm artillery shells — the ammunition most acutely needed for the Ukraine conflict — by a factor of eight. It has opened new ammunition plants in Germany, Spain, and Romania, and is in advanced discussions about production facilities in Ukraine itself. It has acquired defence companies in Australia, the United States, and across Europe, building a truly global defence industrial platform from what was fundamentally a German industrial base.

The acquisition of Loc Performance in the US is the latest step in a strategy that Papperger has described in unusually frank terms: Rheinmetall intends to become the default supplier for NATO's land forces across all of its major equipment categories. The political dynamics of European rearmament, the technical heritage of its product portfolio, and the financial muscle generated by its stock market success have positioned the company to pursue exactly that ambition.