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Saudi Arabia ‘could pick up Rheinmetall Denel Munition stake’
Posted on Thursday, 08 November 2018 12:10
The Saudi Arabian state could bid to acquire the 49.0 per cent stake in Rheinmetall Denel Munition currently owned by South African defence company Denel, according to Reuters.
Citing a source with knowledge of the matter, who wished to remain anonymous as discussions are at a sensitive stage, the news provider said the move could come as a result of a partnership between the government and Denel.
A spokesman for Rheinmetall declined to comment on the report.
According to Reuters’ source, the partnership between Saudi Arabia and Denel could be worth USD 1.00 billion.
The remaining 51.0 per cent stake in Rheinmetall Denel Munition is owned by Rheinmetall Waffe Munition. The target, which was established in September 2008, develops, designs and manufactures medium- and large-calibre ammunition, such as artillery shells.
Reuters noted that the sale of ammunition to Saudi Arabia is currently under review by the German government, a move prompted by the murder of journalist Jamal Khashoggi in the country’s consulate in Istanbul last month.
However, the news provider’s sources said they did not believe a change in the ownership of Rheinmetall Denel Munition would require German state approval.
The target claims to be a world leader in artillery, mortar and infantry systems.
According to Zephyr, the M&A database published by Bureau van Dijk, if a deal goes ahead on the reported terms, it would be the largest transaction targeting an ammunition manufacturer to have been announced worldwide in 2018.
At present, the sector’s most valuable deal of the year is worth USD 551.76 million and involved Elbit Systems agreeing to pick up Israel Military Industries back in March.
This is followed by a EUR 31.71 million Series B funding round as Chinese rocket manufacturer Beijing Landspace Technology secured an investment led by Xinjiang Goldwind Science & Technology.
© Zephus Ltd