Reference News Network, December 29 report: According to the "Nikkei" on December 28, the restructuring of the EU defense industry is becoming increasingly active. Leonardo S.p.A. from Italy and Rheinmetall from Germany have established a joint venture in the tank production field - Leonardo-Rheinmetall Military Vehicles Company. The EU defense spending is expected to reach 381 billion euros in 2025, an increase of about 50% compared to three years ago. The EU hopes to enhance its order-taking capabilities through regional integration and restructuring, to reduce its reliance on the United States in the security field.

Located near the naval base in La Spezia, Italy, there is a large production base of Leonardo. This place produces a variety of weapons systems for supply to other countries, including the "Volcano" shells and the "Striker" remote-controlled weapon system.

Tanks from Rheinmetall will also be added to the production list of this factory. Rheinmetall and Leonardo decided in July 2024 to carry out international cooperation in the tank field, establishing a new company with 50% shares each, and will soon deliver tanks to the Italian army.

Previously, Leonardo had already cooperated with the Italian commercial vehicle giant IVECO to supply tanks. In July of this year, Leonardo announced the acquisition of IVECO's defense division, further expanding its product line on top of its main businesses such as fighter jets and helicopters.

Regarding the expansion of the product line, Laurent Cissemann, CEO of Leonardo-Rheinmetall Military Vehicles Company, said: "The current situation presents an opportunity for all participants." The reason is that since the outbreak of the Russia-Ukraine conflict in 2022, countries have been accelerating their military buildup.

Given that many countries continue to increase their defense budgets, companies not only can see clear investment recovery paths but also find it easier to enter new business areas. Leonardo is rapidly expanding its business scale through acquisitions and collaborations.

Rheinmetall also reached an agreement in September to acquire a German shipbuilding company. With tanks and shells as its core businesses, Rheinmetall has thus entered the field of large-scale maritime equipment such as warships. Rheinmetall's CEO Armin Pape said that the company "will become an important participant in all fields, including land, sea, air, and space," and actively promotes the restructuring within the region.

In the space field, which is closely related to the defense industry, corporate restructuring is also accelerating. In October, Airbus, a European company, announced that it would integrate the space businesses of three parties - Leonardo and Thales from France, including the manufacturing of satellites and space systems and unifying related service functions. American companies such as SpaceX have advantages in the space field, and Europe aims to counter them by integrating the space businesses of three companies within the region. This move also brings significant benefits to the European defense industry.

Samira Bronté from ADS Group, an industry organization representing the UK aerospace and defense sector, said: "To take the initiative in the future, cooperation between enterprises has become more important than ever."

After the end of the Cold War, European and American countries reduced defense spending, leading to a deteriorating business environment for defense companies. In the 1990s, the United States promoted large-scale restructuring through policy, giving rise to giants such as Lockheed Martin and Northrop Grumman; however, due to the tendency of member states to protect their own defense companies, cross-border regional restructuring in Europe progressed slowly.

According to statistics from the Stockholm International Peace Research Institute, in the 2024 ranking of defense business sales by companies, four of the top five global companies are American, with BAE Systems from the UK in fourth place. However, Leonardo, the top company among EU member states, only ranked 12th globally. Whether or not restructuring was carried out after the Cold War has led to the gap between European and American companies.

Leonardo's CEO Roberto Cingolani has long called for "Europe needs to establish a giant defense company." Some estimates also show that the largest source of procurement for EU defense equipment is the United States, with about 80% of the equipment purchased from outside the region.

As Donald Trump, who advocates "America First," returns to power, the cooperation within NATO has begun to waver. Cultivating European companies that can provide stable supply of defense equipment has become an urgent issue.

(Translation by Ma Xiaoyun)

Original: toutiao.com/article/7589099172847780394/

Statement: This article represents the views of the author alone.