Germany’s decision to scrap a €7.6B contract for six F126 warships triggers Rheinmetall’s biggest intraday drop in over a year.
Rheinmetall AG (RNMBF) (RNMBY) shares fell as much as 16% on Wednesday, marking their steepest intraday decline in more than a year. The drop followed Germany’s cancellation of a €7.6 billion ($10 billion) order for six F126 anti-submarine warships, a major setback for the defense contractor.
The contract, initially awarded to a consortium including Rheinmetall, was replaced with an €11.6 billion order for eight MEKO frigates, benefiting ThyssenKrupp Marine Systems (TKMS). The shift reduces projected costs from over €18 billion under the original plan, aligning with budget constraints.
The cancellation removes a key revenue stream for Rheinmetall, while TKMS shares rose on expectations of increased business.