Rheinmetall shares tumble after German government scraps F126 frigate project

Germany’s defence minister Boris Pistorius announced the cancellation of the F126 frigate programme, a €15 billion contract for six large warships that Rheinmetall had hoped would anchor its marine‑segment expansion through the Naval Vessels Lürssen (NVL) acquisition. The decision, explained as a response to mounting cost overruns, delays and technical problems, triggered a sharp sell‑off in Rheinmetall’s stock – the share price fell as much as 19‑21 % in a few days, wiping out roughly €10‑12 billion of market value. Analysts note the loss of a potential €4‑10 billion revenue stream over the coming years, though the company’s overall order book remains robust at over €60 billion, including the F127 frigate and Boxer programmes. In place of the cancelled ships, the German navy will procure eight smaller MEKO A‑200 frigates from Thyssenkrupp Marine Systems for an estimated €11.6 billion. The market reaction also hit other European defence stocks, with Leonardo and the Czech CSG sliding by double‑digit percentages. While some analysts deem the price drop an over‑reaction and keep buy ratings, the share price has stabilised around €950‑€970, still well below its 52‑week high. CEO Armin Papperger is reported to have bought several million euros of his own shares, signalling confidence in the long‑term outlook.