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German, French Defence Firms Form MGCS Project Company

Our Bureau - : Jan 24, 2025 - : 8:34 pm

Representatives from KNDS Deutschland, KNDS France, Rheinmetall Landsysteme, and Thales gathered in Paris to formalise the creation of the "MGCS Project Company GmbH" through a shareholder agreement, on Thursday (Jan. 23). The signing ceremony, attended by French Defence Minister Sébastien Lecornu and German Defence Minister Boris Pistorius, marked a key milestone in the Franco-German Main Ground Combat System (MGCS) programme. This initiative aims to develop a cutting-edge cross-platform combat system to succeed the Leopard 2 and Leclerc main battle tanks by 2040.

This agreement represents a significant step in the formation of the MGCS Project Company, which will serve as the industrial prime contractor for the next phase of the programme. Following contract negotiations with the Federal Office of Bundeswehr Equipment, Information Technology and In-Service Support (BAAINBw) — acting on behalf of both nations through a Combined Project Team — the company will be tasked with developing the system's concept and technological foundations.

Ownership of the new company will be evenly divided, with KNDS Deutschland, KNDS France, Rheinmetall Landsysteme, and Thales each holding a 25% stake. Work responsibilities will also be shared equally between Germany and France. The company will be headquartered in Cologne, Germany.

The industrial partners expressed satisfaction with the agreement, which builds on the momentum created in spring 2024 when France and Germany signed a Letter of Intent to advance the MGCS initiative.

KNDS, a joint venture between Germany’s Krauss-Maffei Wegmann and France’s Nexter, is a European manufacturer of military land systems. The company employs approximately 9,000 people and reported €3.3 billion in revenue for 2023, with an order backlog valued at €16 billion. Its products include main battle tanks, armoured vehicles, artillery systems, and training solutions. KNDS is headquartered in Amsterdam.

Rheinmetall AG, based in Düsseldorf, operates as an international defence contractor and technology firm serving both defence and civil markets. The company has over 31,000 employees across 171 locations worldwide and recorded €7.2 billion in sales for 2023. Rheinmetall Landsysteme GmbH, part of its Vehicle Systems Europe division, focuses on manufacturing land systems.

Thales, headquartered in Paris, operates in defence, aerospace, and digital security sectors. The company allocates nearly €4 billion annually to research and development in areas such as artificial intelligence, cybersecurity, quantum technologies, and 6G. It employs approximately 81,000 people across 68 countries and reported €18.4 billion in revenue for 2023.

The MGCS programme aims to improve standardisation and interoperability of European defence systems, supporting NATO objectives and furthering Franco-German defence cooperation.

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