Germany’s defense procurement world just got significantly more complicated, and Rheinmetall’s stock is feeling it. Shares in the German arms giant dropped 17% after reports emerged that Berlin was overhauling its F126 frigate program, a contract worth tens of billions of euros that Rheinmetall has been positioning itself to lead.
What is actually happening with the F126
The original F126 contract was held by Damen, the Dutch shipbuilder, which ran into significant delays on the program. That created an opening, and Rheinmetall stepped through it. In March 2026, the company acquired Naval Vessels Lürssen, known as NVL, a German shipbuilder with deep roots in naval construction.
The acquisition was a direct bid to position Rheinmetall as the new general contractor for the F126. As of early May 2026, the company was actively negotiating to sign a formal contract by the end of the second quarter, targeting roughly €12 billion in additional funding to complete the program.
The F126 had already burned through approximately €2 billion in costs before these latest financing discussions began. Add the new €12 billion ask and the total projected program cost lands around €14 billion.
