Rheinmetall shares: The history of Rheinische Metallwaren- und Maschinenfabrik Aktiengesellschaft

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• In 1889 the “Rheinische Metallwaren- und Maschinenfabrik Aktiengesellschaft” was founded

• After the two world wars, Rheinmetall had to switch to civilian production areas

• Today, Rheinmetall is internationally active at 133 locations worldwide

With almost 25,000 employees at 133 locations and production facilities worldwide, the MDAX company Rheinmetall is one of the most successful companies in Germany. At the same time, Rheinmetall is one of the oldest companies: It was founded in 1889 as “Rheinische Metallwaren- und Maschinenfabrik Aktiengesellschaft”.

From 1925 the German Reich was the main shareholder of Rheinmetall

At that time, the Hoerder Bergwerks- und Hüttenverein decided to found the company and entrusted the engineer Heinrich Ehrhardt with the management. In the same year, this prompted the establishment of the first plant in Düsseldorf-Derendorf – almost ten years later, the still young company presented the first barrel recoil gun suitable for field service. In 1901 the company bought up the ammunition and weapons factory owned by von Dreyse. But the activity in the defense industry initially had a quick end: As early as 1919, due to the Versailles Treaty, the business had to be converted to the manufacture of civilian products and the focus was on the production of locomotives, steam plows and office machines. This change in production, the many strikes and the supply bottlenecks after the First World War presented the company with a major challenge, so that a bond worth 25 million marks was issued in 1920. A year later, however, Rheinmetall was allowed to resume work in the armaments industry. In 1925, the German Reich took over the majority of shares.

Under this main shareholder, Rheinmetall took over the locomotive builder August Borsig GmbH in 1933 as a future armaments production facility in Berlin. In 1936 the two companies merged to form “Rheinmetall-Borsig AG”. During the Second World War, according to the company’s website, the company’s armaments production was increasingly controlled by the Wehrmacht and the production sites were heavily bombed due to the role Rheinmetall played for the German military.

First steps in mechanical and automotive engineering

At the end of the Second World War, Rheinmetall was once again banned from producing weapons and, as the company writes on its website, it tried its hand at a less than successful program for civilian production. The production ban ended in 1956 and Rheinmetall’s majority shareholding was taken over by the Röchling Group, which sold Borsig AG and instead bought up the Salzgitter AG steel group. The company resumed military production and was renamed “Rheinmetall Berlin AG”. In the years that followed, the company got more and more into arms production and several takeovers followed in this area. At the same time, Rheinmetall took its first steps in the areas of mechanical engineering and electronics from 1958.

In 1979, the company finally delivered the first main battle tank (Leonard 2) to the armed forces. By 1981, the civil divisions were reorganized and the mechanical engineering sector was expanded with the acquisition of the Jagenberg mechanical engineering company. Five years later, the carburettor manufacturer Pierburg GmbH was also bought and the automotive technology sector expanded. From 1989 onwards, the company placed even more value on diversification in the civilian areas and – due to the fall of the Berlin Wall – especially in security technology.

Rheinmetall is expanding and has a greater presence on the international market

Further takeovers followed in the 1990s and the expansion of the areas of office systems, communications technology, armored vehicles, security technology and the automotive industry. In this context, among other things, the Preh works were integrated into Rheinmetall. From 1995, the company also increasingly focused on the international market and expansion and increased its activities in the USA. In 1996 it was renamed “Rheinmetall AG” and in 1997 the company made a significant step for its presence in the automotive industry with the acquisition of the majority of shares in Kolbenschmidt AG (later: KSPG AG), so that in 2003 it was even able to take over the piston business of Mazda Motor Corp .

The mid-2000s saw major changes when the Röchling Group sold its majority stake in Rheinmetall to over 70 institutional investors and 18 million Rheinmetall preferred shares were converted into voting common shares. In the years that followed, Rheinmetall was able to conclude supply contracts with the German armed forces time and time again and to consolidate its position as market leader in various areas with further acquisitions. According to the company, it now has around 60 subsidiaries.

Rheinmetall wants to be CO2-neutral by 2035

In 2010, Rheinmetall and MAN Nutzfahrzeuge AG jointly founded Rheinmetall MAN Military Vehicles GmbH (RMMV), which today serves the entire range of protected and unprotected vehicles for international armed forces. In the USA, Rheinmetall joined forces with General Dynamics to form Defense Munitions International in order to have a say in the arms industry there as well.

Rheinmetall has been restructured several times over the years. Today the company is divided into five divisions: Vehicle Systems, Weapon and Ammunition, Electronic Solutions, Sensors and Acutators and Materials and Trade. In the Corona year 2020, the group imported medical masks from China for the federal government and was involved in the field of hydrogen as a solution for achieving the climate goals. Despite the pandemic, Rheinmetall AG sales in 2020 totaled a whopping 5.4 billion euros, in 2021 it was even more at 5.7 billion euros and in 2022 the value of Rheinmetall shares increased with the Russian invasion of Ukraine and a Demand for weapons in Germany and other EU countries has increased by around 60 percent. Because many countries now want to follow the target set by NATO of raising at least two percent of GDP for armaments expenditure, the demand for arms deliveries at Rheinmetall is now increasing. This could shift the company’s focus again in the coming years. Further changes are pending in the area of ​​sustainability: “The focus on sustainability is an integral part of the Rheinmetall strategy. The company wants to achieve CO2 neutrality by 2035,” writes Rheinmetall on its own website.

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