Rheinmetall receives the go-ahead from a German Federal agency to construct its factory in Ukraine

Rheinmetall and Ukraine's state-owned defense company, Ukrainian Defense Industry (UDI), are moving forward with plans to establish a joint venture in Kyiv for military vehicle services, assembly, and production, according to an announcement today. On 28 September 2023, Germany's Federal Cartel Office, Bundeskartellamt, cleared the way for establishing a joint venture between Rheinmetall Landsysteme GmbH and UDI in Kyiv.

The German Federal Cartel Office has cleared the way for the new company by approving the deal this week. The venture aims to strengthen Ukraine's defense industry capabilities through technology transfers from Rheinmetall.

Initially, the joint venture will focus on the maintenance and repair of vehicles transferred to Ukraine from Germany as part of the government's military aid program. In later phases, the partners intend to jointly manufacture selected Rheinmetall defense products in Ukraine based on a comprehensive technology transfer.

The cooperation could potentially involve the joint development of new military systems between Ukrainian and German engineers for subsequent export by Ukraine.

The creation of the Kyiv-based joint venture comes after an agreement was reached in May between Rheinmetall and the Ukrainian Defense Industry, formerly known as Ukroboronprom.

Rheinmetall said the deal will benefit Ukraine through the prompt delivery of military equipment from Germany as well as the establishment of defense technology capabilities domestically.

The German Federal Cartel Office approved the project this week, just one month after the application was submitted. The companies have also applied for authorization from other relevant agencies, which is expected soon.