Rheinmetall settles Leopard 2 tank rights dispute with KMW

Rheinmetall has settled its legal dispute with the original developer of the Leopard 2, retreating from previous claims about rights to the battle tank from its chief executive.

Germany’s largest defence contractor on Tuesday morning issued a “clarification” regarding comments made by its chief executive Armin Papperger in March, when he told a Swiss newspaper that the company controlled rights to some of the older Leopard 2 models.

His claim prompted Krauss-Maffei Wegmann, the Munich-based company that first developed the Leopard 2 in the 1970s and builds its chassis, to last week file an injunction against Rheinmetall, which produces the tank’s cannons.

“Neither Mr Papperger nor Rheinmetall AG wanted or want to express [ . . .] that Rheinmetall AG has exclusive rights to the Leopard 2A4 main battle tank,” Rheinmetall said on Tuesday, in a statement that had been approved by KMW.

The settlement came just before the two companies were scheduled to meet in court on Tuesday. KMW did not immediately respond to a request to comment.

The Leopard 2 has come to symbolise western support for Kyiv, after German chancellor Olaf Scholz in January yielded to international pressure and agreed to Leopard 2s being sent to Ukraine as part of a deal made with the US.

Berlin had long resisted shipment of German-made weapons into an active conflict zone and approval to deploy tanks was a significant moment for Germany as well as Ukraine, with the first 18 German tanks having reached the war-torn country in March.

The conflict between Rheinmetall and KMW came as the two leading German contractors were preparing further collaboration to support the historic ramp-up of military capacity in Europe’s largest economy.

Aside from their collaboration on the Leopard 2, a joint venture between Rheinmetall and KMW is currently working to retrofit 143 Puma infantry-fighting vehicles at a cost of €770mn.

Rheinmetall said on Tuesday that it had agreed with KMW to settle the dispute and return to business as usual as quickly as possible, as the companies “make an important contribution to the security of our country and our allies”.

Both companies have been key beneficiaries from soaring demand for arms from the war in Ukraine, which last year prompted Scholz to reverse decades of pacifist policy and promise a €100bn special military fund.