Rheinmetall, 4iG and HM EI to Set Up a JV in Hungary
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Rheinmetall, 4iG and HM EI to Set Up a JV in Hungary

  • Digitalisation of the Armed Forces
  • Rheinmetall AG (51%), 4iG Plc (39%) and the HM Electronics, Logistics and Property Management PCLS (10%) signed a preliminary agreement on the establishment of a joint defence industrial company.
  • The company aims to participate in the digitalisation of the armed forces in Hungary and selected NATO member states in Central and Eastern Europe by developing digital combat system solutions as well as ground and flight simulation systems for the provision of most modern soldier training.
  • The joint venture's market entry is supported by a significant increase in demand for defence industrial products.
  • The joint venture created by the partners will be a central element of the digital development strategies of Rheinmetall and 4iG.

Rheinmetall AG (51%), 4iG Plc (39%) and the HM Electronics, Logistics and Property Management PCLS (HM EI Zrt.) (10%) have signed a preliminary agreement to establish a joint venture, 4iG announced on the Budapest Stock Exchange. The founders’ aim is for the joint venture to participate in the digitalisation of the Hungarian Armed Forces and to develop and market digital equipment for Hungary and NATO member states in Central and Eastern Europe to cope with the todays and future battlefield requirements.

According to the preliminary agreement, the company is expected to start operations in the second half of 2022 and will be established to develop and sell digitalization solutions, land and airborne simulation systems for the provision of soldier training within all combat areas and command levels and equipment based on C4ISTAR capabilities. The joint venture will bring together the expertise of the three founding companies to produce military equipment of international excellence.

Rheinmetall’s international military expertise is a unique asset in this cooperation. The company will act as a technology provider for components, products, military capabilities, and know-how (military simulation training, command, and control systems). The expertise of HM EI Zrt. covers defence IT and infrastructure services, tactical combat management and systems integration. 4iG will support the work of the joint venture with its strong IT and telecommunications background, cyber defence and development expertise, and its own significant infrastructure and capabilities to provide the appropriate software development environment.

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Armin Papperger, CEO of Rheinmetall AG: “The joint venture, majority owned by Rheinmetall, will be an integral part of our future digitalisation strategy for the defence industry. The main objective of the cooperation is to support the strategic efforts of Hungary and the Central and Eastern European countries in the digitisation of their armed forces and the achievement of the highest level of NATO compatibility. The location of the company also represents our special commitment to Hungary as a business location.”

Gellért Jászai, Chairman and CEO of 4iG Plc.: “The creation of the joint venture marks another milestone for 4iG. Thanks to the partnership with Rheinmetall, we are able to strategically enter a new business area, the technology and digitalisation part of the defence industry. The cooperation will also greatly support our international market entry and sales activities. The cooperation will facilitate technology and knowledge transfer between the companies, and the jointly developed military solutions could play a key role in attracting further development and manufacturing capacities to Hungary in the future. In developing the joint company's products, we also rely on the decades of expertise of HM EI to serve the specific military needs in line with regional requirements.”

“The joint venture, led by Rheinmetall, will bring a number of benefits to Hungary and the companies involved in the project. The establishment of the company will bring one of the world’s leading defence digitisation developments to Hungary, making the development of the Hungarian defence industry unique in our region. In addition, the systems and similar development competencies existing at HM EI will be able to connect to international defence markets much more easily thanks to the cooperation", pointed out Gáspár Maróth, President of HM EI Zrt. and National Armaments Director, and also added: "With the joint platform company, we are creating a protected industrial and knowledge base of the most modern IT-based command and control technologies in our country, which is of strategic importance from a defence perspective due to the geopolitical situation".

Rheinmetall AG and 4iG Plc signed an agreement in January 2022, whereby the Düsseldorf-based defence industrial company acquired a 25 percent stake in the Budapest-based info-communications company. The parties agreed not only to make a financial investment, but also to lay the foundations for a long-term professional cooperation by acquiring the stake and raising capital, which will be further strengthened by the establishment of the joint venture.

Source: Rheinmetall AG
Date: May 17, 2022
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