Germany cancels €10‑bn frigate program, Rheinmetall shares plunge

Germany announced on June 24 that it is scrapping the multi‑billion‑euro F126 frigate program after significant delays, cost overruns and other risks. The original plan to build six large frigates, valued at roughly €10‑18 billion, was replaced by a purchase of eight smaller MEKO‑200 (A‑200) frigates from Thyssenkrupp Marine Systems (TKMS) at an estimated total cost of €11.6 billion.

Rheinmetall, which had been positioned as the lead contractor for the F126 project, saw its shares tumble between 13 % and 17 % – the sharpest intraday drop in more than a year – and hit a 15‑month low. The cancellation also pulled down other German defence‑related stocks such as Hensoldt, Renk and BAE Systems, while TKMS shares rose 8‑10 % on the news.

The German defence ministry said more than €2 billion had already been spent on the cancelled programme and that continuing it would have pushed total costs above €18 billion. The decision reflects fiscal pressures on Europe’s rearmament plans and adds uncertainty to defence‑spending outlooks, prompting analysts to cut price targets for Rheinmetall and reassess the sector’s investment case.