Defense stocks plummet on report Germany is scrapping warships; Rheinmetall stock down 13%
Defense stocks plummeted on Wednesday after a report that Germany will abandon plans to build six warships, fuelling investor fears that the boost to defense contractors from increased government spending may not fully materialize. Berlin is planning to scrap a multi-billion-euro project to build the F126 frigates, according to the Financial Times, citing two people familiar with the matter. It would have been the biggest warship commission since the Second World War. Instead, Berlin will buy eight smaller Meko A-200 frigates, according to the report. German munition maker Rheinmetall , a big beneficiary of German government contracts, fell as much as 14% in morning trading. The company had been expected to become the lead contractor of the F126 frigate program in a deal worth as much as 12.8 billion euros ($14.5 billion), pending budget committee approval. It would have taken over the contract from Dutch shipyard Damen Naval after years of delays. CNBC has reached out to Rheinmetall ...
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