Rheinmetall Strengthens Its Presence in United States with Strategic Acquisition of Loc Performance.

Rheinmetall has announced the acquisition of Loc Performance Products, LLC, a renowned vehicle specialist based in Plymouth, Michigan. This strategic acquisition, valued at $950 million, is expected to enhance Rheinmetall's capabilities in the production and supply of military vehicles, both in the United States and globally.
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Rheinmetall aims to strengthen its position in the competition for major US Army contracts, particularly the XM30 infantry fighting vehicle program. (Picture source: RTX)

Finalized on August 13, 2024, this acquisition aligns with Rheinmetall's overall strategy to expand its footprint in North America, the world's largest defense market. By integrating Loc Performance’s operations, Rheinmetall aims to strengthen its position in the competition for major U.S. Army contracts, particularly the XM30 infantry fighting vehicle program and the Common Tactical Truck (CTT) program. These programs represent a combined potential of over $60 billion, with Rheinmetall as a key contender.

Loc Performance, with a skilled workforce of around 1,000 employees, is a well-established supplier to the U.S. government, particularly in the production of track systems for military vehicles. The company’s expertise in drivetrains, suspensions, track systems, and other critical vehicle components is expected to significantly enhance Rheinmetall’s ability to meet the stringent requirements of the U.S. Army.

This acquisition not only provides Rheinmetall with expanded manufacturing capabilities, including 1.7 million square feet of modern production space, but also strengthens its supply chain with Loc Performance's technical expertise in the maintenance and enhancement of military vehicles. This increased capacity is seen as crucial for Rheinmetall as it seeks to fulfill large-scale orders under the U.S. Army's modernization programs.

Armin Papperger, CEO of Rheinmetall AG, emphasized the strategic importance of this acquisition, stating, "The United States is a key market for our growth strategy. The acquisition of Loc Performance is a decisive step in increasing our market share, ensuring that we are well-positioned to meet the demands of upcoming major orders."

Matthew Warnick, CEO of American Rheinmetall Vehicles, highlighted the operational benefits of the acquisition, noting that it equips the company with the manufacturing readiness needed to realize major U.S. military contracts. He added, "This acquisition allows us to achieve 100% local value creation in the United States, a crucial factor in securing and executing these contracts."

Jason Atkinson, CEO of Loc Performance, expressed enthusiasm for the merger, stating, "Combining Loc Performance’s 53 years of manufacturing experience with Rheinmetall's next-generation technologies will create a powerful end-to-end solution, offering superior products to our customers and driving growth for our combined company."

Rheinmetall's acquisition of Loc Performance underscores its commitment to supporting the U.S. Department of Defense’s modernization efforts, which aim to enhance the effectiveness and mobility of U.S. soldiers on the battlefield. This initiative is expected to significantly strengthen Rheinmetall’s military vehicle business in the United States, managed by American Rheinmetall Vehicles in Sterling Heights, Michigan.

This acquisition is set to further solidify Rheinmetall’s role as a key player in the U.S. defense industry, providing it with the resources and capabilities necessary to compete for and secure large-scale contracts in the years to come.