German defence firm Rheinmetall announces Romania acquisition

(Reuters) - The German defence group Rheinmetall said on Thursday it was acquiring a majority stake in Romanian vehicle maker Automecanica Medias as it looks to expand its footprint as a manufacturer of military vehicles.

Rheinmetall said it would hold a 72.5% stake in the company through Rheinmetall Landsysteme GmbH, while the remaining shares would stay in private hands.

In the medium term, the group sees annual sales potential from its acquisition at around 300 million euros ($323 million), expecting incoming orders in 2024 to be in the three-digit million-euro range.

Rheinmetall has significantly expanded its production capacities as Germany and other countries ramp military spending and aid to Ukraine after the full-scale Russian invasion in 2022 and German Chancellor Olaf Scholz's subsequent defence push.

"With this acquisition, Rheinmetall is strengthening its footprint in Central Europe and tapping into significant sales growth and new, promising customer countries in the region," the company said in a statement.

The acquisition still requires approval by the relevant government authorities before it takes effect, the company added.

In December Rheinmetall won a major order worth 328 million euros in Romania to modernize the country's Oerlikon GDF 103 air defence artillery systems.

The group already has locations in two other countries on NATO's eastern flank, Hungary and Lithuania.

Automecanica Medias is a producer of special vehicles, truck bodies and trailers for both the civil and military sectors.

($1 = 0.9274 euros)

(Reporting by Anastasiia Kozlova and Amir Orusov; editing by Matthias Williams)