Rheinmetall Stock: Joint Venture Eyes Iveco Defense Acquisition

Rheinmetall AG and its Italian partner Leonardo are reportedly in negotiations to acquire Iveco's defense division, potentially strengthening their position in the European defense sector. The targeted acquisition, valued at approximately €1.5 billion, comes amid a favorable market environment as European nations substantially increase defense spending in response to growing Russian threats. This strategic move would significantly enhance the portfolio of the German-Italian joint venture formed last October, which currently specializes in manufacturing infantry fighting vehicles, battle tanks, and specialized bridge-laying vehicles. Despite these expansion opportunities, Rheinmetall's stock experienced a slight correction phase recently, dropping 2.3% in Friday's trading session amid a mixed market environment.

Valuation Concerns Among Potential Buyers

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Sollten Anleger sofort verkaufen? Oder lohnt sich doch der Einstieg bei Rheinmetall?

The ambitious €1.5 billion price tag sought by the Turin-based vehicle manufacturer has apparently deterred some potential buyers. Iveco had previously announced its intention to divest its defense business in February, creating this acquisition opportunity. Though experiencing short-term downward pressure, Rheinmetall's long-term outlook remains positive, buoyed by Germany's anticipated defense spending increases. Industry analysts note that Germany's debt brake may no longer limit defense expenditures going forward, potentially providing additional tailwinds for the DAX-listed company.