The Panther KF51 is a German main battle tank (MBT) that will form the basis for the new Italian MBT. Credit: Karolis Kavolelis/Shutterstock.

Germany’s Rheinmetall and Italian company Leonardo and have formed a joint venture (JV) to create a new European hub to develop and produce military combat vehicles.

The JV follows after the two companies signed a memorandum of understanding in July 2024, with the new entity expected to be operational by the first quarter of 2025, pending regulatory approvals.

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Known as Leonardo Rheinmetall Military Vehicles (LRMV), the new JV will have headquarters in Rome and an operational base in La Spezia. It will focus on the industrial development and marketing of Italy’s new main battle tank and the Lynx platform for the Armoured Infantry Combat System programme.

LRMV’s primary project will be the new Italian main battle tank, based on Rheinmetall’s Panther KF51, set to replace the current Ariete tanks.

The Italian Armoured Infantry Combat System (AICS) programme aims to procure more than 1,000 armoured combat systems in 16 variants, including the classic infantry fighting vehicle, infantry fighting, anti-aircraft, reconnaissance, and anti-tank vehicles.

The Lynx platform will be used for the Italian AICS programme.

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Rheinmetall CEO Armin Papperger said: “We are creating a new heavyweight in European tank production. Leonardo and Rheinmetall, two leading European suppliers of defence technology, are joining forces to carry out ambitious projects.

“We are primarily addressing the Italian market, but we will also be targeting other partner nations which are in need of modernising their combat systems in the future. Rheinmetall has the perfect technologies for Italy’s requirements.”

Rheinmetall has established a strong presence in Italy, operating through three brands. It employs around 1,500 people across five locations, generating approximately €1bn ($1.1bn) in sales.

The partnership envisions a 50:50 split in labour, with 60% of the work, particularly final assembly and testing, to be conducted in Italy.

Leonardo will contribute mission systems, electronics, and weapons integration, tailored to the Italian client’s specifications.

Leonardo CEO Roberto Cingolani said: “This is a significant step towards the creation of a European defence system based on specialised shared platforms. Rheinmetall and Leonardo aim at developing state-of-the-art technologies able to compete at international level.”