Rheinmetall has agreed to acquire US military vehicle manufacturer Loc Performance in a $950mn deal.

The German company said that the deal would expand its business with the US military, helping it target high-volume major orders for US army vehicle programmes potentially worth more than $60bn. 

Loc makes parts including track systems and road wheels for combat vehicles.

Rheinmetall has been one of Europe’s biggest beneficiaries of a jump in German defence spending since the start of the Ukraine war, with the group’s share price surging about sixfold since 2022. It now seeks to carve out a larger share of the highly consolidated US defence market.

Rheinmetall is, together with Michigan-based General Dynamics Land Systems, the only company left in the race to develop the XM30 combat vehicle, which has been commissioned by the US army to replace its M2 Bradley infantry fighting vehicle. The contract is expected to be worth $45bn and cover 4,000 vehicles.

The company said that it was also applying for the US army’s Common Tactical Truck programme, with the winning company in line for a contract worth roughly $16bn for 40,000 trucks.

Loc Performance was founded in 1971 in Plymouth, Michigan, and has since expanded to a total of four manufacturing locations in Michigan and Ohio, employing roughly 1,000 people. 

The company last week announced it had amassed a record order book worth €48.6bn, as sales and profits have continued to surge amid the escalation of wars in Ukraine and Gaza.

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