Rheinmetall (RHM.DE) falls 17% as Germany drops F126 frigate plan

Rheinmetall (RHM.DE) fell 17% after reports that Germany will abandon plans to build six F126 frigates. CNBC said the project would have been Germany's biggest warship commission since the Second World War and that Rheinmetall had been expected to become lead contractor.

The catalyst is not a routine defense-sector rotation. CNBC reported that Berlin is planning to scrap a multi-billion-euro F126 project and buy eight smaller Meko A-200 frigates from TKMS instead. AFP, citing Germany's defense ministry, said the decision was a response to significant delays affecting the F126 program. Other reports put already-incurred taxpayer spending near €2.3B and the larger program value above €10B.

The stock reaction met the crawler's single-name threshold because it combined a double-digit move with a named procurement catalyst. The report also moved peers: TKMS was described as the alternative supplier, while broader European defense shares traded lower as investors reassessed how much of Germany's higher military budget will become booked orders.

The financial stake is Rheinmetall's order intake. A large naval contract would have supported visibility beyond the company's land-systems and ammunition businesses. Without it, investors have to separate confirmed Bundeswehr orders from headline defense budgets. The next checks are a formal ministry procurement notice, any Rheinmetall statement on lost scope, and TKMS contract timing for the proposed eight-vessel replacement.

Not investment advice. Verify all figures with primary sources before acting.