Defense companies Leonardo (Italy) and Rheinmetall (Germany) are establishing a joint venture.

Rheinmetall stated that the deal will help scale up the production of new armored vehicles for the Italian military.

“Leonardo and Rheinmetall are establishing a joint venture aimed at creating a new European center for the development and production of military equipment,” the press release states.

The joint venture was named Leonardo Rheinmetall Military Vehicles (LRMV).

Its shares are divided in half between the German and Italian parties.

The company is headquartered in Rome and has production facilities in Spezia, Italy.

Earlier, it was announced that the joint venture would operate on a 50:50 basis with headquarters in Italy.

LRMV’s main task is to develop and produce a main battle tank to replace the Ariete tanks for the Italian military.

It is planned that the combat vehicle will be based on the promising German KF51 Panther tank.

LRMV is expected to produce Lynx infantry fighting vehicles.

On the basis of this armored vehicle, the plan is also to create a self-propelled anti-aircraft system with the Skyranger module, reconnaissance, and anti-tank modifications. The management also plans to export the armored vehicles after satisfying the Italian army’s rearmament needs.

However, while the Lynx BMP already exists in metal, the currently presented KF51 and KF51-U projects with an unmanned turret are far from being completed prototypes, as all rights to their Leopard 2 tank chassis belong to the competitor company KNDS.