Germany scraps its F126 frigate program, dealing Rheinmetall a naval setback
Berlin abandons the troubled €18bn anti-submarine warship line for eight TKMS MEKO A-200s, sinking Rheinmetall shares and lifting TKMS
Summary
Germany cancelled its F126 frigate program, abandoning plans for six anti-submarine warships after Dutch builder Damen's delays and overruns pushed projected costs from about 10 billion euros toward more than 18 billion. Berlin will instead buy eight TKMS MEKO A-200 frigates, roughly 6.3 billion euros for the first four with an option on four more by end-2026. The move stripped Rheinmetall of an expected lead-contractor role worth around 12.8 billion euros, sending its shares down more than 15%, while TKMS surged over 10%. It lands as Friedrich Merz's government pushes higher NATO spending.
Why it matters
The reversal exposes the gap between Europe's 5% spending ambitions and its shipbuilding capacity. It rewards an established yard over Rheinmetall's land-to-sea expansion, and signals Berlin will cut losses on troubled programs rather than throw good money after delayed hulls.
What to watch
- Whether Berlin exercises the option on the second four MEKO frigates by year-end.
- Rheinmetall's response after its 1.5bn-euro Lürssen naval acquisition.
- Knock-on effects for Damen and the wider European frigate market.