Military systems and equipment producer Rheinmetall announced on February 1 that it is taking over a majority 72.5% stake in Romanian vehicle maker Automecanica Medias, mentioning the plant’s proximity to Ukraine.

“Bringing Automecanica Mediaș into the Rheinmetall family marks another important milestone in our strategy of strengthening the group’s presence in Central Europe, which in turn contributes to bolstering the defensive capabilities of the EU and Nato on Europe’s eastern flank,” Rheinmetall chief executive Armin Papperger said.

Rheinmetall, producer of the Leopard main battle tanks, already has locations in two other countries on Nato’s eastern flank, Hungary and Lithuania.

The deal still requires approval by the relevant government authorities before it takes effect. Following the transaction, the Romanian plant will operate under the name Rheinmetall Automecanica.

The German company’s presence in Romania means that forces deployed on Nato’s eastern flank will be able to count on shorter response times and more robust supply chains, the company explained. Specifically, the plant in Medias is poised to play a key role in maintaining the operational readiness of Western-built combat vehicles in Ukraine, as well as assuring logistical support.

Automecanica Mediaș is a Romanian producer of truck build-ons and trailers for the civilian and military market, and Rheinmetall has been cooperating with it since 2022 when the two partners joined forces to operate a maintenance and repair facility for military vehicles in Satu Mare.

From €76mn in 2022, Rheinmetall sees Automecanica’s sales as potentially increasing to €300mn in the medium term. It expects incoming orders in the current financial year to be in the hundreds of millions of euros.