Rheinmetall Shares Slump After Reports That Germany Is Dropping Frigate Project

By Adria Calatayud

Rheinmetall shares fell sharply after media reports indicated Germany is abandoning plans to build a new warship model, sinking one of the biggest projects in the arms maker's pipeline.

Shares in Rheinmetall fell as much as 16% in European morning trading before bouncing back somewhat, meaning the stock shed more than one third of its value since the start of the year. Shares in rival TKMS, which is working on an alternative project, jumped 10% and took their year-to-date gains above 20%.

Der Spiegel magazine and the Financial Times reported the German government is dropping a plan to build six F126 frigates, in what would have been the biggest project in the history of the country's navy.

Germany's defense ministry and Rheinmetall didn't immediately respond to requests for comment.

Rheinmetall Chief Executive Armin Papperger said during an earnings call last month that the company had made a bid for the F126 contract and was in talks with the German defense ministry. Papperger signaled the contract would be valued at more than 10 billion euros ($11.38 billion) and that the signing could take place in the second quarter.

The news means Rheinmetall probably won't hit its order-intake target for the second quarter and the year as a whole, analysts at J.P. Morgan wrote in a research note. The company is targeting 80 billion euros in orders this year, including about 12 billion euros from the F126 project that it expected to book in the second quarter, the analysts added.

A TKMS spokesman said the company hasn't been notified yet of the German government's decision. TKMS previously said it is offering the German Navy an alternative to the F126 with its MEKO A-200 combat frigate.

Write to Adria Calatayud at adria.calatayud@wsj.com

(END) Dow Jones Newswires

June 24, 2026 04:49 ET (08:49 GMT)