Germany’s Rheinmetall announced on 2 December 2024 that it has completed the takeover of the US company Loc Performance Products LLC, which will now operate under the name American Rheinmetall Vehicles.
The Düsseldorf-based technology group announced the purchase of the renowned vehicle specialist, which is based in Plymouth, Michigan, in August 2024. Following approval by competent supervisory authorities, the transaction was closed on 29 November 2024.
The agreed purchase price for Loc Performance Products was based on an enterprise value of USD 950 million (EUR 907 million).
“With this strategic acquisition in the USA, Rheinmetall is expanding its position in the world’s largest defence market and strengthening its core business in the field of land vehicles for military customers worldwide,” the company stated in a press release.
The investment follows Rheinmetall’s drive for growth in the United States, which will be an important domestic market for the group in the future. Rheinmetall expects the acquisition to bring considerable benefits not only for its US business, but also for its global activities.
The acquisition also strengthens Rheinmetall’s production capacity in the United States, with a view to targeted high-volume major orders for US Army vehicle programmes with a total potential of over USD 60 billion, according to the company.
Rheinmetall is one of two remaining participants in the current prototype phase of the US Army’s XM30 Mechanized Infantry Combat Vehicle (MICV) programme, which is intended to introduce a new generation of infantry fighting vehicles (IFVs) into US service. The volume for the programme is estimated at around USD 45 billion for around 4,000 IFVs. At the same time Rheinmetall is applying for the US Army’s Common Tactical Truck (CTT) programme, which has a volume of around USD 16 billion for around 40,000 trucks.
“We are making this investment because we have a clear strategy for growth and the United States will be an important core market for us in the coming years,” Rheinmetall Chairman Armin Papperger was quoted as saying in a Rheinmetall press release. “I would like to extend a warm welcome to the approximately one thousand employees at Loc Performance Products to the Rheinmetall Group. We greatly appreciate your expertise and look forward to our joint successes.
“The acquisition of Loc Performance Products proves that we are consistently focusing on success in the USA and want to expand our share of the large market volume,” Papperger added. “We have a promising position in two major military projects, both in the XM30 infantry fighting vehicle programme and in the CTT project. Everything therefore speaks in favour of this acquisition: Loc Performance Products is already pursuing a sustainable business model with robust organic growth, has a highly qualified workforce and offers us ample capacity reserves for the targeted orders in the USA. We can thus realise 100% local value creation in the USA.”
Founded in Plymouth, Michigan, in 1971, Loc Performance Products is a diversified full-service provider for both military and commercial customers with more than 1,000 highly qualified employees. In addition to its headquarters in Plymouth, the company has additional locations in Lansing and Lapeer in Michigan and St Marys in Ohio. The company already features a modern, efficient production area of 160,000 m2 with considerable capacity for future expansion.
Loc Performance Products is a high-performance full-service provider of drivelines, suspensions, track systems, rubber products, armour products and fabricated structures for vehicle platforms. The company is an established supplier to the US government and, in particular, the original equipment manufacturer for most military ground vehicle track systems in US service. The company’s products are also used by well-known vehicle manufacturers in the agriculture, construction, mining, locomotive, mass transportation and oil and gas industries.
The production capacities of Loc Performance Products include, in particular, modernised manufacturing, machining and welding technologies that can meet the critical manufacturing requirements of the US Army’s XM30 and CTT programmes.
