Rheinmetall Shreds Civilian Past and Locks In Drone Megadeal — Market Applauds Cautiously
12.06.2026 - 03:41:26 | boerse-global.de
Rheinmetall is executing a radical two-front strategy: shedding its last major civilian division while simultaneously locking in a billion-euro drone contract with the German military. The moves are reshaping the DĂĽsseldorf group into a pure-play defence powerhouse, but investors remain watchful as the stock trades far below its highs.
Power Systems Sold, Pure Defence Realised
The company has agreed to sell its Power Systems division to investor AEQUITA for a preliminary €350 million. The deal, expected to close in the fourth quarter of 2026 subject to antitrust clearance, severs Rheinmetall's last substantial civilian roots — the automotive supply business that long dragged on margins and added corporate complexity.
From now on, the group will focus exclusively on military land, air, and space systems. The sale comes at a prescient moment: just a day earlier, Morgan Stanley downgraded the European defence sector from "positive" to "neutral", citing a lack of fresh catalysts after years of share rallies. The broker noted that order inflows appear to be stabilising at elevated levels.
Drone Contract Adds Billions to Order Book
Yet operational momentum remains formidable. Rheinmetall’s order backlog stands at roughly €73 billion, and a newly sealed framework agreement with the Bundeswehr for loitering munition adds yet another multi-billion layer. The contract, announced on 22 April 2026, covers the FV-014 drone, a 20-kilogram system that can loiter for 70 minutes, reach 100 kilometres, and penetrate over 600 millimetres of armour with its HEDP warhead.
Should investors sell immediately? Or is it worth buying Rheinmetall?
The first call-off under the framework is worth around €300 million gross, with deliveries due to begin in the first half of 2027 and qualification starting in the second quarter of 2026. An optional tranche could include a five-figure number of autonomous drones. Rheinmetall is presenting the FV-014 this week at the ILA Berlin trade fair, where it also links the system with the LUNA NG reconnaissance drone — a long-range platform that flies for more than twelve hours and can operate in real?time with the loitering munition. The Bundeswehr has already ordered twelve serial LUNA NG systems including spares and training.
Three Suppliers, One Flexible Strategy
The German military is not putting all its eggs in one basket. On June 2, 2026, it disclosed that three manufacturers are under contract for loitering munition: Helsing and Stark received their deals on February 26, two months before Rheinmetall. The framework includes break milestones and innovation clauses, allowing rapid procurement and continuous technology upgrades without locking into a single product line.
Market Reaction: Cautious Relief
Shares of Rheinmetall rose 2.83% on Thursday to €1,228.00 following the Power Systems sale announcement. The stock has edged higher since, trading recently at €1,235, a 10% gain over the past month. However, it remains almost 23% lower year?to?date and 38% below its 52?week high of €1,995. The Relative Strength Index sits at 47, suggesting selling pressure is easing but not yet reversing.
Rheinmetall at a turning point? This analysis reveals what investors need to know now.
The company’s stated ambition to boost annual revenue to €50 billion by 2030 will require a dramatic ramp?up in production capacity. The recent Romanian order — also in the billions — adds to the workload. For now, the market is giving management credit for cleaning up the portfolio. The real test will come when the Power Systems deal closes in the fourth quarter and investors can assess whether pure?defence margins deliver the promised uplift.
Ad
Rheinmetall Stock: New Analysis - 12 June
Fresh Rheinmetall information released. What's the impact for investors? Our latest independent report examines recent figures and market trends.
