Yahoo Finance Germany to Order Satellites For €2.1 Billion From OHB
(Bloomberg) -- Germany plans to buy three satellites for its armed forces from OHB SE in an order worth €2.1 billion ($2.3 billion), according to people familiar with the procurement.
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Lawmakers from Chancellor Olaf Scholz’s ruling coalition are expected to approve the purchase during a closed-door meeting of the parliamentary budget committee on Wednesday, said the people, who asked not to be identified because the plans aren’t public.
The lawmakers are also set to greenlight the purchase of two additional navy F126 frigates for about €3 billion in a plan announced last week. They plan as well to approve the purchase of 45 head-up displays for the Tornado fighter jets in an order worth some €40 million.
OHB shares jumped 2.1% on the news on Monday morning.
The big-ticket procurements are part of Germany’s push to modernize the Bundeswehr triggered by Russia’s full-scale invasion of Ukraine. Berlin also plans to order 20 more Eurofighter jets for as much as €4 billion.
Bremen, Germany-based OHB, which employs more than 3,000 people, specializes in satellite systems for earth observation, navigation, telecommunications, science and reconnaissance. The German order is for two communication satellites and a frequency-securing satellite, the people said.
Scholz has doubled down on his pledge that Germany will meet NATO’s defense-spending goal of 2% of gross domestic product over the longer term, even after a debt-financed €100 billion special fund is exhausted after 2027.
How the government can achieve that given lower tax revenue projections and a strict constitutional limit on net new borrowing — known as the debt brake — remains to be seen.
--With assistance from Jan-Patrick Barnert.
(Adds market move in the fourth paragraph.)
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